LGR Report for May 2008
HUD Requiring Two Appraisals for Jumbo Loans
Mortgages that exceed the Jan. 1 conforming loan limit of $417,000 may require two appraisals, HUD says in a mortgage letter (2008-09). A second appraisal is required for these loans if the loan-to-value ratio (excluding mortgage insurance premium) equals or exceeds 95 percent and the property is in a declining market. A declining market is determined by the appraiser or the lender.
The letter also limits the loan-to-value for cash-out refinances. The loan-to-value may not exceed 85 percent of the appraiser's estimate of value if the homeowner pursues a cash-out refinance and the loan balance, excluding the FHA mortgage insurance premium, exceeds $417,000. For more info contact Jerome Nagy at N.A.R. 202/383-1233.
S. 2795, the Small Business Health Options Program (SHOP).
SHOP will provide a tax credit to small employers (including the self-employed) to help offset the cost of health coverage
Small employers who pay at least 60 percent of the premium will receive a tax credit of up to $1,000 for each covered employee ($2,000 for family coverage). The full credit will be available to the smallest employers (10 or fewer employees) and will be phased down as the size of the employer increases (up to a maximum of 50 employees). A bonus credit will be available for employers who pay more than 60 percent of the premium.
Since self-employed individuals pay 100 percent of the premium, they will receive a tax credit of $1,800 ($3,600 for family coverage).
STATE:
AB 2187 (Caballero) Mortgage Foreclosure, C.A.R. oppose.
AB 2187 revises foreclosure laws by requiring lenders mailing a notice of default to a borrower whose real property may be subject to foreclosure to also mail that borrower a copy of a "homeowner's bill of rights" that describes the process of foreclosure employed by the lender and sets forth the borrowers rights. Additionally, the bill proposes to require lenders, upon the completion of a foreclosure, to notify the local government of its plan for managing the maintenance of the property and provides that should the lender not maintain the property local governments may recoup reasonable costs in order to prevent or remedy blight, hazardous conditions, or unsightliness in the community. C.A.R. opposes AB 2187 unless it is amended, because, as currently written, the bill does not define the "homeowner's bill of rights”.
AB 2359 (Jones) Loans, C.A.R. oppose.
This bill would impose borrower defenses on assignees or purchasers of mortgage loans that do not exist under current law, including forcing government sponsored entities in the secondary mortgage market to be responsible for mistakes made by the originators in the loans they purchased. C.A.R. opposes AB 2359 because it will further exacerbate disruptions in California's mortgage market by imposing liability on assignees of certain mortgage loans. Mortgage investors need certainty in the loan products markets in which they invest. If a measure like AB 2359 is enacted, investors will shun California or demand higher prices for the loans they purchase that are originated in this state.
SB 1610 (Dutton) Property Tax Transfers.
This bill would provide that the base year value of an original property may be transferred to a replacement dwelling that is of greater value, and would require the base year value of the replacement dwelling to be calculated by adding the difference between the full cash value of the original property and the full cash value of the replacement property to the base year value of the original property. This bill would
extend the period of time during which a severely disabled person or a person over 55 years of age has to purchase or construct a replacement dwelling, in order to qualify for the transfer, from 2 years to 3 years of the sale of the original property.
Senator Bob Dutton has been named vice chair of the Budget Committee by Senate Republican Leader Dick Ackerman and leader-elect Dave Cogdill.
Senator Ron Calderon's office reports the Plumbers & Manufacturers Institute has named Calderon its Legislator of the Year, largely for his efforts to clarify and balance California's two-year-old law requiring a reduction in the amount of lead used in the manufacture of water pipes in the state of California..
Senator Gloria Romero reports promoting senior field deputy Henry Lo to district director. Lo, who is Romero's longest serving staff member started in the new role in March. Lo replaces Christine Chavez.
Senator Bob Margett's office has undergone a reorganization and reports Sean Adams has been named to the newly created position of chief of staff, and Legislative Aide Usha Mutschler has been promoted to legislative director.
REGION:
Los Angeles County:
Congestion Pricing: Los Angeles County officials here are seeking federal money to put toll lanes initially on three freeways, including the 210 and 10 in the San Gabriel Valley and the 110 south of downtown. The 60 Freeway is next on the list. The tolls would vary by time of day and be highest during rush hour. Single-occupant cars would probably pay the most to use the lanes.
The effort got a boost when New York City probably forfeited $354 million in federal money after state officials refused to approve a plan to charge an $8 toll to cars entering lower Manhattan. The idea was to reduce air pollution from idling traffic and raise nearly $500 million for mass transit.
Officials cite that you must pay a fare to board a bus, so the same should apply to roads. Officials also cite that the current gasoline taxes are indirect fees which are insufficient to pay for road fixes. Opponents cite that the freeways have been paid for with taxpayer money and to toll them is an indirect double tax. Opponents also cite the impact on commuter reliant businesses as well as the impact on the working class labor market.
San Bernardino County:
Prop 90. An ordinance introduced by Supervisors Gary Ovitt – 4th District and Brad Mitzelfelt – 1st District would enact Prop 90 in San Bernardino County for five years. Under Prop 90 sellers of a home in another county could transfer the property tax bill on the property to a home bought in San Bernardino County. Prop 90 provisions require that the seller is at least 55 years of age, or permanently disabled and the value of the home purchased is not greater than the value of the home sold. The idea is to allow older homeowners who have owned the same home so long that their property taxes are kept low under Proposition 13, to move to San Bernardino County without taking the huge hit to their property taxes that they would otherwise. San Bernardino County Officials claim that about 500 homeowners a year would take advantage of Prop 90. Opponents of the ordinance worry about the reduction in revenues for local governments.
Seven of California's counties, including Los Angeles, Orange, San Diego and Ventura, have adopted ordinances similar to this one, as permitted under Proposition 90, which was passed by California voters two decades ago. San Bernardino County should become the eighth to do so.
LOCAL
AZUSA:
Since mid-January 2008 two of the Rosedale developments four major builders have stopped construction. Fieldstone and William Lyon homes have stopped for the immediate future, but Christopher Homes and Taylor Morrison are continuing to build. Officials attributed the halt to a faltering housing market that has plagued the overall economy.
Rosedale developer Azusa Land Partners said the recreation center will not open until enough homes are sold to support it through homeowners' association fees. Overall Rosedale is financially intact. City officials have said up to $5 million that was going to be paid to Azusa Land Partners for building on-site municipal water infrastructure will be paid in advance in the form of a short-term loan to help free up cash for other projects, including completion of Sierra Madre Boulevard, curb and gutter work and recreational facilities. Officials state it is a very short-term loan and interest will be paid. Residents are frustrated with the high HOA fees and lack of amenities such as parks and the proposed recreation center.
In other business, Azusa followed the lead of Los Angeles County and became one of a growing number of local and national governments to begin curbing the use of plastic bags, seen as both a blight issue and environmental threat. China, Ireland and South Africa have implemented tough measures, either banning free, carry-out plastic bags or imposing per-bag fees. San Francisco in 2007 was the first U.S. city to ban plastic bags.
The county approved a program in January requiring large grocery stores, retailers and pharmacies to reduce plastic bag usage by 30 percent in 2010 and 65 percent by 2013, or face prohibitions on plastic bags or per-bag fees. Los Angeles County sent a letter to all cities in L.A. County, asking them to implement the program. The eventual goal is to phase out plastic bag use as L.A. County residents use billions of plastic bags annually and less than 5 percent are recycled.
Azusa officials are considering producing their own city-branded reusable bags.
BALDWIN PARK:
Property owners rallied against a proposed multimillion-dollar development at a forum backing eminent domain reform. More than 200 residents and business owners attended the meeting at the Baldwin Park Marriott. It was hosted by the Community Alliance for Redevelopment Accountability, a Baldwin Park-based nonprofit formed in opposition to the city's redevelopment plans for the downtown.
Baldwin Park is in talks with Bisno Development Co. for a 125-acre renovation of its main commercial corridor that could include a new hotel, a charter school and thousands of luxury residential units. More than 200 businesses and homes face relocation through eminent domain, depending on the outcome of the project and two legislative initiatives - both slated for June - aimed at limiting eminent domain powers. One of those initiatives, Proposition 98, would restrict city agencies from taking property through eminent domain and turning it over to private developers.
A question-and-answer period garnered several heated comments from angry residents and business owners who accused city officials of being evasive about project plans.
CHINO HILLS:
After 17 years of cityhood, Chino Hills is finally getting a permanent City Hall, library, and police and fire headquarters when the new $40.6 million government center opens this year. The 30,000-square-foot Chino Hills Police Station is set to open in late August, and the surrounding civic buildings are expected to open around November..
The center, which was started in summer 2007, includes a 59,000-square-foot City Hall, the 28,000-square-foot James S. Thalman Chino Hills Branch Library, and a new 18,000-square-foot administration building for the Chino Valley Independent Fire District.
Now under construction, the buildings are part of a 50-acre redevelopment project near the intersection of Grand Avenue and Peyton Drive.
To the north, the much-anticipated shopping center, the Shoppes at Chino Hills, is set to open May 23. The entire development will serve as the downtown core the city has been without since its incorporation in 1991, officials said.
CLAREMONT:
A new law that prohibits beauty salons from opening in Village storefronts was passed unanimously by the City Council. Salons will now only permitted to open in second-floor or alley locations. The salon restrictions were introduced because city and Chamber of Commerce officials feared that with as many as 25 beauty salons in the Village, the district was losing is "balance" between retail and service shops. One Village boutique owner who attended the meeting praised the decision. Brenda Monahan, owner of Three French Hens, said she felt the new restrictions would help retail businesses in the Village as it will free up some of the parking spaces. The restrictions were favored by most existing salon owners. The law allows salons to make improvements and sell their businesses.
Claremont officials are also seeking approval from the State of California to be permitted to purchase foreclosed homes in Claremont and in turn utilize them as affordable housing. If approved by the State, the City would utilize existing monies set aside for affordable housing.
In other matters Councilwoman Ellen Taylor was appointed to the position of Mayor and
Councilman Corey Calaycay was named Mayor ProTem.
COVINA:
The city's police association rejected a contract offer, and a union official later criticized city management. The offer would have increased benefit compensation paid to officers, who have been working without a contract since January. The Police Association of Covina instead asked to return to negotiations. City officials acknowledged that the city pays employees less than other cities in salaries but said total value of their compensation, including benefits, are comparable. The city's finance director, chief deputy city clerk and assistant community development director have all accepted positions in other cities.
The city has recently declared a fiscal crisis. Residents will vote on a measure renewing a utility tax that brings $5.5 million in revenue to the city on June 3. If the measure is not renewed, it will expire in 2009 and the city is scheduled to let go of about 100 employees, five of which are police officers beginning in July. Covina police officers monthly salary ranges from $4,714 to $5,729 compared to officers in West Covina whose monthly salary ranges from $5,228 to $6,356.
EL MONTE:
With the Puente Hills Landfill set to close in four years, city officials have adopted a program they hope will encourage business owners and landlords to recycle waste, rather than throw it away. City officials say the program will also cut truck traffic by exclusively contracting with four haulers, Phoenix Waste and Recycling, Waste Management, American Reclamation and Valley Vista Services, and assigning specific areas to trucks. While businesses and multifamily residences will see a hike in trash collection rates, officials said, increased recycling will lower bills. Officials said the new rates are structured to encourage recycling by charging more for non-recycled trash.
GLENDORA
BUSINESS LICENSE TAX
CVAR continues to monitor the issue and has asked CVAR legal counsel for advice on the matter.
OTHER ISSUES:
The City Council voted unanimously to raise fees for city services. Fees for everything from building permits to business licenses to animal control services to water meter installation were raised. The city's finance director, Josh Betta, said at the meeting that the fee raises were designed to ensure that the city was breaking even on the costs of its services. Betta added that the changes would bring in about $90,000 for the remainder of the 2008 year, and more for 2009, the first full year with the new charges.
The city is facing a $1.6 million budget shortfall for next year's budget, and the fees will go towards offsetting that defecit, said Betta.
The city has reached a tentative settlement with a developer and former mayor who did grading work on a property without city permits. The developer, John Gordon, agreed to pay a $155,000 fine, and will donate a 14-acre parcel from his Gordon Highlands development to the Glendora Community Conservancy. Gordon said based on his communications with his lawyer, he believed he and the city have a firm deal in place.
The agreement ends several years of negotiations between the city and Gordon. Gordon served on the city council in the 1980s.
The grading took place in 2004, when Gordon removed more than 220,000 cubic yards of earth to create building areas and driveways for 30 homes in the northeast portion of Glendora, according to a city report. Gordon was forced to stop work after the city determined he had violated city codes.
LA PUENTE:
After five years of failed negotiations, a bid to expand the city's largest car dealership the City Council is considering an exclusive negotiating agreement with Beverly Westwood, a retail developer, for a site on Hacienda Boulevard long sought by Ed Butts Ford. If the agreement is approved, negotiations with the Ford dealership will be terminated, City Manager Carol Cowley said.
Ed Butts Ford managers have been negotiating with city officials for the past five years to expand their dealership onto city-owned property at 1529 to 1545 N. Hacienda Blvd.
The dealership is the city's largest sales-tax generator, earning about $300,000 yearly. But environmental issues have prevented any lease agreements from being finalized.
About two years ago, the city's redevelopment agency purchased an acre next to the dealership with the intention that Ed Butts would lease the site for 15 years and have the
option to buy. Ed Butts has been battling over liability issues to the site because it was once home to a soil contamination cleanup facility. City officials argue the land has been tested and the soil is clean.
A February letter from Beverly Westwood to the City of LaPuente outlined the company's interest in purchasing the land and developing retail such as a CVS, banks and restaurants. The company already owns a corner parcel at Hacienda Boulevard and Francisquito Avenue, which is next to the city's site and home to a Pizza Hut.
LA VERNE:
Development of the former Kmart site on Foothill Boulevard is expected to be completed by the end of the summer. It will include more than 100,000 square feet of retail space anchored by Vons and Ross. City officials have been working for several years to redevelop this site. The former Kmart shut its doors in 2002 after filing for bankruptcy, and Arcadia-based Vons paid $2.2 million to assume the lease. In 2004, Los Angeles-based Combined Properties, Inc. purchased the land and began working with Vons to develop the site. After several planning commission and council votes, the current project - dubbed the Commons - was finally approved. More than two dozen shops, including several existing retailers to the west of the former Kmart building, will fill the site. About 93 percent of the commercial space has been leased to retailers like Jamba Juice, Game Stop and Famous Footwear. The 51,000-square-foot Vons - which opened in end of April, includes a Starbucks, a bank and a Vons-operated fueling station.
Vons operates two other stores in La Verne, but will eventually shut down the supermarket at 1475 Foothill Blvd., which is less than two blocks from the Kmart site.
The City estimates they will earn about $100,000 yearly in revenue through sales from the Commons.
RANCHO CUCAMONGA :
Victoria Promenade, a development that will bring a bank, gas station, two restaurants and a 112-room hotel to the northeast corner of Foothill Boulevard and Rochester Avenue, is scheduled to be completed this fall. On the southeast corner of that intersection, Victoria Commons, formerly known as the Footchester Center, is also expected to open this fall with Italian restaurant Buca di Beppo as the anchor.
Four Points by Sheraton Hotel will anchor Victoria Promenade, which will also have a two-story retail office building. In addition to Buca di Beppo, Victoria Commons will have another restaurant, a drive-thru eatery, bank and a two-story office building. Slated just south of the Victoria Commons development, away from street frontage, is a utilities project planned in Ontario. The city bought 12 acres of land on the southeast side of the intersection with plans to use a portion of it to build a well and reservoir.
There is no timeline for when the utilities project will start, but since construction for Victoria Commons has already begun, a pipeline through the easement will have to be built alongside the retail construction.
UPLAND:
Officials within the Upland Unified School District have proposed the new calendar year in hopes of aligning their schedule with neighboring school districts, which would allow families to schedule vacations without missing school or work. The plan which would start the next school year 15 days early was met with mixed reaction from parents, teachers and students at a town hall meeting. The new calendar would mean starting school in the middle of August, ending the first semester before winter break, and bringing spring break to the end of the third quarter. The school year would conclude before Memorial Day. All 14 schools in the Upland Unified School District would be affected by the calendar. School District officials cite that the proposed calendar would allow more preparation and focus for test dates. A final decision will be made by late June. Local districts that have adopted the earlier start date for the 2009-10 school year include Chaffey Joint Union, Alta Loma, Etiwanda, Central and Fontana school districts.
In other matters residents opposed to an animal shelter in Memorial Park will take their battle to court. The group of residents who originally protested construction of an animal facility in the park before the City Council have filed a lawsuit against the city, hoping it will reconsider those plans. Last year, the council decided to sell the original location for the new animal shelter - a parcel on Arrow Route west of Benson Avenue - and earmark the money for a new facility in Memorial Park, on the current site of the YMCA.
The Y is moving to the former Wayne Gretzky roller hockey building on the northwest side of the park, along Foothill Boulevard. The city's current animal shelter sits on a closed landfill on 15th Street.
Date Posted: 4/24/2008
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