10-13-08Merced Sun-StarValley cities move to make lenders tidy up foreclosed homesMany are tired of abandoned eyesores dragging down home prices...Eddie Jimenez, The Fresno Beehttp://www.mercedsunstar.com/167/v-print/story/495735.htmlThe scene is familiar in neighborhoods throughout the Valley: a dead lawn, debris in front and a murky swimming pool in back, sure signs of a foreclosed home.To prevent eyesores, Valley cities are taking steps to hold lenders responsible for maintaining foreclosed properties.Homes that are not kept up "affect both the quality of life and the economic state of a neighborhood," said Brian Calhoun, a Fresno City Council member.A state Senate bill passed in July allows cities to fine owners of neglected foreclosure properties up to $1,000 a day.Some Valley cities have adopted ordinances requiring lenders to pay fees to register foreclosed properties and authorizing fines or liens if yards and pools aren't maintained.Registration allows cities to keep track of who is responsible for a property's upkeep, Valley city officials said...Fresno city officials are working on an ordinance that would strengthen city policies to oversee and authorize penalties on abandoned and foreclosed properties. The proposal does not call for a fee to register properties, however.The ordinance is expected to go before the council within the next few weeks.Officials say the city has about 2,600 foreclosed homes...The Selma City Council approved an ordinance in August requiring banks and lending agencies to register and pay $200 annually for each home they own through foreclosure.The companies also must maintain yards and pools, said D-B Heusser, Selma's city manager. If they don't, the city will hire someone to do the work and bill the lender. An unpaid bill would be applied as a lien against the property, and the lien would have to be paid off before the home could be resold, he said.Fines imposed in Selma could reach $1,000 a day, said Michael Gaston, the city's community development director.The ordinance requires the city to notify a lender if a property falls into disrepair. The owner has 14 days to improve the property's condition. Thus far, one owner has been given notice, Gaston said.Selma has about 65 foreclosed houses, less than 1% of the city's homes, he said.In Kerman, lending and mortgage companies must pay $50 annually to register home foreclosures, Patlan said...Kerman's ordinance is modeled after one that Chula Vista, a city of 235,000 south of San Diego, implemented about a year ago.The ordinance has reduced the number of unkempt houses, said Doug Leeper, Chula Vista's code enforcement manager."We still have problems, but not nearly as many as we would have without this ordinance," he said.Fines in Chula Vista range from $100 to $1,000 a day, "depending on the severity of the problem," Leeper said."We just keep escalating the penalty until we get their attention," he said. "My goal was not to be their property manager. They speak one language -- money."Banks and lending firms also must pay past-due water bills to restore water service, Leeper said."They howled at first. Several understood. They've come around," he said.In the first 10 months, Chula Vista officials issued more than $500,000 in fines and penalties, he said. Unpaid fines are applied as a lien on the property...Modesto BeeRoad tax backers dig deep for Measure SFirms standing to gain from work giving most...Garth Stapleyhttp://www.modbee.com/local/story/461316.htmlCompanies that might benefit from increased road work in Stanislaus County are contributing the lion's share of money to the Measure S campaign.Businesspeople investing in the county's future also have been generous toward the effort to persuade two-thirds of voters on Nov. 4 to accept a half-cent sales tax increase for road projects.Yes on Measure S raised $160,600 through Sept. 30, with at least $100,000 coming from road construction and civil engineering firms and related suppliers, according to finance disclosure forms.The forms also make clear that supporters are relying on a San Francisco political consulting firm, despite strong wishes earlier this year by elected officials to steer the work to a local consultant. There isn't one in these parts with experience in the difficult task of passing a transportation tax, said Yes on S co-chairman Paul Van Konynenburg.The campaign tapped the California Alliance for Jobs for $50,000. That group is a coalition of heavy construction firms pushing for public infrastructure investment.Other donors with road-building stakes include George Reed Inc., Modesto ($25,000); road engineering consultant T.Y. Lin International, San Francisco ($7,500); Ross Carroll Construction, Oakdale ($5,000); transportation engineers Rajappan & Meyer Consulting, San Jose, ($5,000); Nexus Engineering, Mo- desto ($2,500); Calaveras Heidelberg Cement Group, Fresno ($2,500); Nolte Associates, Sacramento ($2,000); transportation consultants Gray-Bowen and Co., Walnut Creek ($1,000); and Collins Electrical Co., Stockton ($1,000).Van Konynenburg and fellow Yes on S co-chairman Kirk Lindsey each donated $5,000 through their companies, Britton-Konynenburg Partners and Brite Transport Systems, respectively. Lindsey also is a member of the California Transportation Commission.The company of county Supervisor Jeff Grover, Solecon Industrial Contractors, donated $2,500. He is a strong supporter of the campaign, officially named Citizens for Better Roads and Safer Streets.Fellow Supervisor Jim DeMartini, a longtime Republican Party leader, contributed $5,000.Additional notable contributions include:$5,000 from 5.11 clothier Dan Costa, Modesto; Delta Sierra Beverage, Modesto; Pacific Southwest Container, Modesto; and Turlock Dairy and Refrigeration.The California Association of Realtors' political action committee also gave $5,000. Two years ago, the group donated $25,000 to Measure K, a similar transportation tax that failed to capture the required two-thirds approval.$2,000 from Jeff Arambel, Patterson; and Atherton and Associates, Modesto.$1,000 from Bohannon Insurance Group, Modesto; Boyett Petroleum, Modesto; Gianelli and Associates, Modesto; Mark D. Nicholson, Modesto; Prime Shine Inc., Modesto; Storer Transportation, Modesto; V.A. Rodden Inc., Oakdale; and the Bank of Stockton.Van Konynenburg has said the campaign ultimately could raise as much as $500,000...Fresno BeeBailout stirs talk of revolt in GOPValley Republicans are upset with Radanovich...John Ellis http://www.fresnobee.com/263/v-printerfriendly/story/931153.htmlSome prominent local Republicans are fed up with congressional representatives from their own party -- and Rep. George Radanovich is at the top of the list. They're upset enough that they're advocating the unthinkable: seeking candidates to challenge these entrenched incumbents in 2010. For some, it comes close to violating Ronald Reagan's famed 11th commandment -- don't speak ill of fellow Republicans. But the recent House vote for a $700 billion financial rescue plan seems to have been a tipping point. Several local Republicans say elected members of Congress should have to face a tough re-election battle and explain themselves -- and their votes -- to constituents. Many of these Republicans, including Radanovich, were swept into Congress in 1994 on former Rep. Newt Gingrich's agenda of small government, fiscal restraint, lowering taxes, a balanced budget and term limits. "I think the drift away from what got these guys elected is dramatic," said local Republican strategist Michael Der Manouel Jr. "I don't think they relate ... with what's going on in the world." Der Manouel, who is chairman of the Lincoln Club of Fresno County, penned a commentary for the popular California conservative Web site Flashreport, writing Oct. 5 that members of Congress and state legislatures have "insulated themselves from competition through idiotically skewed districts." "The only real strategy we center-right small-government conservatives have now," he continued in his commentary, "is to step up and challenge Republican incumbents who have served longer than 10 years, and challenge them in primary contests." There are plenty of Republican congressional representatives who fit that description, but only one is from the central San Joaquin Valley -- Radanovich. Some, like Der Manouel, are careful not to single out Radanovich. But others are more direct in their criticism of the Mariposa Republican -- who voted for the financial rescue plan -- and are comparing him to Visalia Republican Devin Nunes, who voted against it. "A lot of people are frustrated by George's work ethic on Valley issues," said businessman Tal Cloud of Sanger, who ran unsuccessfully for Congress in 1992 and remains active on Republican issues. "He hasn't taken a leadership issue in much, and when he does, he's on the wrong side of the issue." Radanovich defended himself, and his vote on the bailout, saying he has to put principles above politics. "In a situation like this, I felt like the right thing to do was to support the effort," he said of the bailout vote. "In my view, this was something that had to happen to avoid a crash or a depression." Radanovich also said he knew some type of bailout would pass eventually, and that the longer it took, the more pork would be added to win wavering representatives. "The sooner we got this off the table, the better," he said. Cloud, however, is not only upset by Radanovich's bailout vote, but also for his continued support of the San Joaquin River restoration bill. The bill would approve channel improvements and other work needed to return salmon to the river. But in an effort to get the bill passed, Sen. Dianne Feinstein stripped funding to pay for the improvements. Cloud worries that if the bill passes without funding, San Joaquin Valley interests will get stuck with paying for required improvements. He thinks Radanovich and Fresno Democrat Jim Costa should pull their names from the bill to protest the funding cut. Radanovich said the bill needs to pass so federal court oversight will end; later on, legislators can work out issues such as funding. Reedley resident Cliff Unruh, who ran unsuccessfully for Congress and helped manage former Fresno Mayor Jim Patterson's unsuccessful 2002 congressional campaign, called the bailout bill "a big disappointment" that brings the Republican Party full circle to 1994, when it swept to power in Washington with the "Contract With America." "Maybe George does need a challenge," he said. The current financial crisis, Radanovich said, is an emotional issue and "right now people deserve an explanation." He said he plans to "get out a lot more and do the explaining." This backlash isn't surfacing among Democrats. There are no calls for primary election challenges against Costa or Merced Rep. Dennis Cardoza, both of whom voted for the $700 billion bailout. "I haven't heard anything about that -- nothing," said John Hutson, a Fresno Democrat who is active with labor unions in the building trades. Local Republicans also are angry at Costa and Cardoza, and would love to see them challenged from within the Democratic Party. They're also pushing for redistricting reform, which would likely result in more competitive congressional districts. "Everybody that is in office, from both parties, that has allowed this mess to occur needs to do the noble thing and leave, but they're not going to do that," said frustrated Friant resident Ken Kay, who ran for the state Assembly in 2000. Fresno businesswoman Octavia Diener thinks elected officials have become too comfortable. A bona fide challenge -- either during the primary or general election -- might change that. "I think if they're not challenged, they can do whatever they want," she said. "They're not living the life that we're living. It's the proverbial ivory tower they've built themselves into." Der Manouel thinks that if Republican presidential nominee John McCain loses to Democratic candidate Barack Obama, "there's going to be a meltdown in the Republican Party that will be a healthy thing. That meltdown needs to include a challenge to anyone who's been in office during the time Republicans have abandoned their principles." Unruh agrees. "These challenges," he said, "can sometimes end up being a rude awakening." Washington PostStocks roar back on bank rescues, Morgan deal...Leah Schnurr, Reutershttp://www.washingtonpost.com/wp-dyn/content/article/2008/10/13/AR2008101300303_pf.htmlNEW YORK (Reuters) - Stocks surged on Monday, following the worst week ever, as global efforts by governments to pump cash into banks sparked a rally in financial shares, while credit markets showed some signs of loosening up.Governments, including those of Germany and France, stepped up efforts to restore confidence in the shaky banking system by offering multibillion-dollar bank rescues after weekend talks in Washington.Morgan Stanley was the biggest percentage gainer on the S&P index, soaring more than 60 percent, after Japan's Mitsubishi UFJ Financial Group said it paid $9 billion for a 21 percent stake in the beaten-down U.S. securities firm that has turned itself into a bank holding company.Also among the banks, Wachovia climbed 4 percent after the Federal Reserve approved the $12.46 billion takeover of the U.S. bank by Wells Fargo & Co. The S&P financial index rose 5.7 percent."The news that once again, U.S. authorities and other governments are still trying to fix this financial crisis was a positive spark and it appears to be sticking and is finally leading to a bounce," said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research in Cincinnati, Ohio. "We were due for any type of a bounce. We were oversold by pretty much historic levels."...The optimism over bank rescues, however, came at the same time as a U.S. bank sector downgrade by Citigroup, which contributed to declines in other bank shares, including JPMorgan, off 1.8 percent at $40.88.U.S. Treasury Secretary Henry Paulson has called a meeting of top banking heads for later this afternoon, according to a report from the Wall Street Journal. Paulson will discuss plans to take stakes in financial firms, according to the report.Wall Street capped its worst week ever on Friday, falling for an eighth straight session, as investors feared the credit crisis was spiraling out of control and the global economy was threatened by deep recession.In a sign that credit markets may be loosening up, the cost for banks to borrow dollars, sterling and euros from each other over three months fell.New York TimesDeal for Wachovia Wins Fed Approval...THE ASSOCIATED PRESShttp://www.nytimes.com/2008/10/13/business/13wachovia.html?ref=business&pagewanted=printWASHINGTON (AP) — The Federal Reserve has approved Wells Fargo’s $11.7 billion acquisition of Wachovia.The Fed’s move comes after federal antitrust regulators backed the deal on Friday, allowing Wells Fargo, based in San Francisco, to buy Wachovia, based in Charlotte, N.C.Citigroup on Thursday walked away from its own efforts to buy the bank. Wachovia was hit by a $5 billion run on deposits in late September after the failure of a West Coast rival, Washington Mutual, according to court documents filed on Friday by Citigroup.CNN MoneyEurope to U.S.: You messed up the rescue, tooThe plans for a massive bank bailout by European governments differ strikingly from the U.S. approach...Peter Gumbel,, Europe editorhttp://money.cnn.com/2008/10/13/news/international/gumbel_eurobank.fortune/index.htm?postversion=2008101313PARIS (Fortune) -- First you mess up the world's financial system. Then you blow the rescue of it. Now let's show you how to do it properly.That, in a nutshell, is the less-than-flattering message European governments are sending to the U.S. as they mount their own gigantic bank bailout. The plans, announced Monday after two weeks of dithering, involve Britain, Germany, France and some others recapitalizing national banks that require help, and providing state guarantees and other measures to kick-start the stalled credit market. The details are strikingly different from the U.S. approach adopted by U.S. Treasury Secretary Hank Paulson and the Federal Reserve Board. And there's a big reason for that: The Europeans think Paulson got it badly wrong, and have watched aghast as he failed to restore confidence in the world's financial system.In particular, they now think - and are openly saying - that it was a huge mistake to allow Lehman Brothers to fail. But they also believe that the $700 billion bailout plan was badly misdirected. Rather than buying up toxic assets, as the Paulson plan initially intended, they believe the role of government intervention should be to recapitalize the banks directly in exchange for some control of operations. That's at the core of the European plans announced Monday (and apparently the direction Treasury is now heading, too).Much of the griping has been taking place anonymously, so as not to cause political ructions. But France's Finance Minister Christine Lagarde cast aside diplomatic niceties on the eve of last weekend's G-7 meetings in the U.S. when she told French radio: "as soon as you let one domino fall, the rest risk crashing down." While not defending Lehman - "there were certainly bad decisions taken by that bank, bad management," she said, Lagarde nonetheless argued that allowing the investment bank to fail merely heightened anxiety in international banking and led to the seizing up of interbank lending. It's an argument that has now become conventional wisdom in Europe, where the mantra for this week's rescues is: Relax, no bank will be allowed to fail.Too complex, too opaqueThe second lesson from the U.S. handling of the crisis concerns the way government money is best used. Here the Europeans have a valuable precedent: Sweden's banking crisis in the early 1990s, which was resolved by the state forcing a consolidation and clean-up of the system even as it kept the banks afloat. Starting in Sept. 1992, the government in Stockholm announced a general guarantee for the whole of the banking system, encouraged the central bank to organize massive injections of liquidity, and created a state agency that essentially forced banks to give up any remnants of make-belief accounting and quickly write down the value of their assets to much more realistic levels. The strategy worked, and Urban Bäckström, the former Swedish central bank president who played a central role in the rescue, has said that "prompt and transparent handling" of the problems were a key to the success.By contrast, the initial Paulson plan involved the U.S. government buying up the problem securities of banks in a procedure that risked being anything other than prompt and transparent. "It looks as complex as the credit derivatives that caused the problem in the first place," one top European finance official told me, on condition I didn't quote him by name.Of course, this is not exactly a time to crow, and there are some big unanswered questions about the European solution, too. One is just how tough governments will be in imposing their conditions on national banks, including forcing mergers of stronger and weaker ones. That's particularly a concern for Germany, which has the most fragmented banking sector of any of the big European nations and has the biggest potential for discovering nasty surprises. Germany's problem is that any banking consolidation is likely to run into opposition from regional authorities, who have a say in the running of savings banks networks. And with national elections scheduled for next year, the fragile coalition government under Chancellor Angela Merkel doesn't have a very strong hand to play.Her finance minister Peer Steinbrück, who could end up as her challenger in the election, has been among the most vocal European government official complaining about how the problems started in the U.S. sub-prime market - and how they will result in the erosion of American influence. "The U.S. will lose its superpower status in the world financial system," he has said, predicting that the dollar will also lose ground to the euro and the Japanese yen.Stock markets for the moment are applauding the concerted European response. Only time will tell whether they're getting it right. It puts a huge onus on governments to fix the system, and the track record there is mixed. France nationalized its banks in the 1980s under President Francois Mitterrand for ideological reasons, but made such a mess of the job that it privatized them again. Still, after two weeks of conflicting and contradictory moves and statements in Europe, a bit of coordination certainly feels good - and if it looks like it stands a good chance of working, all the better