Merced Sun-Star
Bill would even playing field for home buyers
Customers must use lenders' title companies at higher cost...SCOTT JASON
In a way, the real estate market is burning as hot as it was three years ago.
Five hundred and forty-four homes were sold last month, according to figures by real estate analyst DataQuick. In March 2005, 589 homes were sold, the beginning of that autumn's crest.
Today's market, nonetheless, is dramatically different. Homes sold are almost always foreclosures. The median price has fallen to $105,000, almost a fourth of what it was during the market's peak.
And local title companies, despite a busy market, are starved for business.
"We're all feeling it," TransCounty Title Co. president Peg Lawler said Wednesday. "We've been taken over by these REO (real estate-owned) banks. They're taking our money away from us."
Major banks selling foreclosed homes sign contracts with industry giants, such as Fidelity National Title Insurance Co. and First American. They force buyers to use their services, often at a higher cost that local ones, Lawler explained.
TransCounty's fees for a transaction usually fall between $800 and $1,000, she said. She's seen statements charging twice or three times that much.
TransCounty, with branches in Merced, Los Banos and Atwater, has shrunk from a staff of 56 at its busiest to 26. Smaller firms have gone out of business.
The practice of forcing buyers to use certain title insurance companies is illegal under the federal government's Real Estate Settlement Procedures Act, though there's been little enforcement.
State lawmakers are looking to crack down on it because it puts a lock on buyers' options.
It also hurts small businesses that don't have contracts with banks.
At the urging of local real estate leaders, Assemblywoman Cathleen Galgiani, D-Stockton, introduced "The Buyers Choice Act," a bill that will let homebuyers choose what escrow office is used during a foreclosure sale.
The bill was unveiled in late February. It cleared the Assembly's Banking and Finance committee Monday with an 8-1 vote. The Judiciary Committee will likely take it up May 5, and it could be on the Assembly floor soon after.
Assemblyman Joel Anderson. R-El Cajon, cast the dissenting vote because he said he believes the bill needs to spell out good cause.
It invites frivolous lawsuits without that section, he explained.
"I wanted to vote for it, but I couldn't vote for an uncooked bill," he said. "In legislation, the devil's in the details."
The bill met some resistance from the California Association of Realtors, which worried that the bill would put the power in the hands of the buyer, making the choice of an escrow firm non-negotiable.
The association agreed to support the bill after Galgiani agreed to add a sunset date to the bill, according to its newsletter.
The act is sponsored by the Escrow Institute of California, which has seen some of its members overwhelmed by the number of titles it must process under the bank contracts, institute president Tim Egen said.
"Buyers are being forced into a situation. The evidence is very clear," he said.
Egen praised the bill because it would impose civil penalties that buyers must pursue.
It doesn't create another layer of bureaucracy.
There has been no formal opposition to the bill.
"It's hard to stand in front of a public committee and defend an illegal practice," he said.
Our View: Ambitious goal to cut fuel carbons
State's new rules would be risky, so regulators must be prepared to modify them, if necessary.
Back in 1975, California launched the modern era of clear air regulation when it mandated the use of the catalytic converters.
Now California has poised to take an equally historic step when the California Air Resources Board votes on a proposed low-carbon fuel standard.
If the Air Resources Board approves the controversial standard, a complicated regulatory scheme designed to reduce the carbon content of motor fuels, it will become the first governmental agency in the world to do so.
The goal of the ambitious plan is to cut the emission of planet warming greenhouse gases emitted by cars and trucks 10 percent by 2020.
Will it work? Frankly, no one knows for sure.
What the air board is proposing has never been tried before. The assumptions built into its proposed regulations require the commercialization and substantial expansion of some emerging and still experimental technologies.
Even the ARB technicians who have designed the regulations acknowledge that their full impact can't be known until the program has been up and running for a while.
Still, it is worth trying.
The consequences of global warming -- from rising sea levels and longer, more damaging droughts, among other things -- are real and frightening. So is the nation's dependence on foreign sources of oil.
The low-carbon fuel standard the state air board seeks to impose is designed to reduce both.
Its most controversial feature is its effort to look beyond just what comes out of the tailpipe but at the whole production cycle when assessing the carbon footprint of a transportation fuel.
That's why producers of corn ethanol, the most common non-petroleum fuel, oppose the standard.
ARB scientists have concluded that in rare cases the production of corn can result in more carbon emissions than simply using oil.
And, in general, corn ethanol has a larger trail of carbon emissions than other kinds of biofuels. That's true, in part, because carbon absorbing trees and natural grasses are cut down often to plant the corn.
Other critics of the program want the air board to go further when assessing not just the potential carbon emitting consequences of growing more corn but the economic and social justice implications as well.
As more corn is grown to fuel cars, the price of corn as a food source for some of the world's poorest people has soared. But the board has stopped short of such considerations, which is just as well given the complexities it already faces.
By design, California's proposed low-carbon fuel standards favor the still somewhat experimental cellulosic ethanol (produced from grasses, crop waste and eventually perhaps even algae) as well as hydrogen and electricity. These fuel sources tend to emit less carbon.
The plan foresees a robust market of trades, with oil companies bidding for blends of the alternatives that have the lowest possible carbon footprint.
In the past, every time the price of oil has dropped, investment in research and development of less environmentally damaging alternatives has dried up.
ARB seeks to alter that dynamic by giving investors an economic incentive to put their money in the most planet-protecting fuel available.
While the new rules should be approved, they are risky. Impacts must be monitored closely. If they fail to achieve their goals or create some unintended consequence, regulators must be prepared to adjust or jettison them as needed.
Modesto Bee
More foreclosures coming to the Modesto area...J.N. Sbranti
The lull in foreclosures is about to end.
While it hardly seemed that way, the foreclosure rate was relatively low the past six months in Stanislaus, Merced and San Joaquin counties.
But things are going to get a whole lot worse.
MDA DataQuick released statistics Wednesday showing that notices of default — the first step in the foreclosure process — spiked dramatically in January, February and March compared with the last three months of 2008.
Mortgage defaults rose nearly 58 percent in Stanislaus, 54 percent in Merced and 66 percent in San Joaquin.
There's typically a six-month lag between the filing of default notices and repossession by lenders. So the region could be slammed with foreclosures starting midsummer.
During the past two years, 36,313 homes in the three counties have been lost to foreclosure, according to DataQuick. In the past six months, an additional 14,420 homeowners have defaulted on their mortgages and been formally warned they are in jeopardy of having their property repossessed.
The valley isn't alone in this mess.
Throughout California, lenders filed a record number of mortgage default notices during the first three months of this year. There were 135,431 default notices during the quarter, up 80 percent from the last three months of 2008.
"The nastiest batch of California home loans appears to have been made in mid- to late-2006, and the foreclosure process is working its way through those," said John Walsh, DataQuick president. "Back then, different risk factors were getting piled on top of each other. Adjustable-rate mortgages can be good loans. So can low down-payment loans, interest-only loans, stated-income loans, et cetera. But if you combine these elements into one loan, it's toxic."
Among those who got loans in August through November 2006, more than 9 percent have defaulted on their mortgages. The default rate for loans made in 2004, by comparison, has been less than 1 percent.
Lenders don't start the foreclosure process without reason. During the first three months of this year, homeowners receiving notices of default were behind on their mortgage payments by a median $12,926. The median size loan in default was $346,400.
Mortgages were least likely to go into default in Marin, San Francisco and San Mateo counties. The highest foreclosure rates were in in Riverside, Merced and San Joaquin counties.
While there was a decline in foreclosures in the fall and winter, DataQuick said it primarily was because of temporary policy changes and a moratorium placed on lenders. Those changes required lenders to take more steps before foreclosing.
They've taken those steps; now, they're ready to start foreclosing again.
Fresno Bee
Federal biologists weigh protecting salamander...The Associated Press
BAKERSFIELD, Calif. Federal biologists are considering whether to add a rare salamander found in remote regions of Kern County to the federal list of threatened and endangered species.
The U.S. Fish and Wildlife Service said Tuesday biologists will take the next year to consider public input and decide whether to list the Tehachapi slender salamander under the Endangered Species Act. California authorities consider the species threatened.
The lungless salamander lives out most of its life underground, where it breathes through its smooth, thick skin. It can be brick red or brown and when threatened, can coil its body like a snake.
There are only two known populations: one in Caliente Canyon, in the southern foothills of the Sierra Nevada, and a second in the Tehachapi mountain range.
State pesticide rules relaxed
In a victory for farmers, more emissions from fumigants to be allowed...E.J. Schultz
SACRAMENTO -- State regulators this week finalized looser pesticide rules that environmentalists say will slow efforts to clean the Valley's smoggy air.
The Department of Pesticide Regulation will allow more emissions from "fumigants" -- pesticides that are injected into soil to kill pests and disease.
The ruling is a victory for farmers, who feared that stricter limits would force some growers to stop using pesticides in years when the region approaches the limit.
Pesticides contribute to about 6% of the smog problem in the Valley, according to state figures. Fumigants are just one type of pesticide.
The department "claims that this is not a big deal because it's such a small amount," said Alegría De La Cruz, an attorney with the Center on Race, Poverty & the Environment. But "this, from our perspective, is not making good on a promise that they made to Valley residents to protect [their] health."
The center is considering filing a lawsuit to change the rules. The regulations cover the prime growing season of May 1 though October 31.
The department said the looser limit will still "meet our obligation to reduce pesticide emissions, but do so in a way that avoids placing an unreasonable or disproportionate burden on fumigant pesticide users," according to regulatory documents.
The rule covers smog-making gases, called volatile organic compounds, emitted by pesticides.
For the Valley, the rule sets the emissions limit at 18.1 tons per day, 2.1 tons higher than what clean-air activists wanted.
In 2006, a federal judge ruled that the pesticide department ignored clean-air laws and ordered regulations that would cut pesticide emissions in the Valley by 20% from 1991 levels.
But in August, the department won an appeal to overturn the ruling. The new regulations call for a smaller decrease -- a 12% cut from 1990 levels. Other regions still face a 20% cutback, the department said.
The rules became an issue during state budget negotiations earlier this year when Republican lawmakers sought to write the looser rules into law, which would have made it harder for environmentalists to pursue a change. The GOP backed off.
The department is now turning its attention to nonfumigant pesticides. Those regulations must be in place by 2014, according to law.
Sacramento Bee
Panel: Wastewater ammonia 'likely' alters Delta...Matt Weiser
A panel of independent scientists has affirmed in a new report that ammonia from urban wastewater is a "likely" contributor to environmental shifts in the Sacramento-San Joaquin Delta.
But the panel, assembled by the CalFed Bay Delta Authority, says more research is needed to determine where ammonia fits among numerous threats to the estuary.
The Bee reported last year on emerging research suggesting that ammonia from treated urban sewage, discharged continuously into Central Valley rivers, may disrupt the Delta food chain. The Sacramento metro area's wastewater, treated by the Sacramento Regional County Sanitation District, is the largest source of ammonia in the Delta.
But the research has been hotly disputed by the sanitation district and others. So CalFed agreed to host an independent review of existing science.
That review, released last week, raises more questions than it answers. But significantly, the four scientists on the panel conclude the subject merits further study as a potentially significant factor in the degradation of Delta.
Increased ammonia "likely has led to major modification" of the estuary to favor foods less nutritious to fish as well as toxic algae blooms, the panelists state.
Numerous Delta fish species have been in a death spiral since about 2001. Leading the pack are the Delta smelt, longfin smelt, threadfin shad and striped bass. A more charismatic victim is the Central Valley fall-run chinook salmon, whose collapse caused fishing bans this year and last.
Declines in the smelt species triggered new rules that cut water exports from the Delta, aggravating drought conditions in some parts of the state. Those exports are one suspect in the Delta's decline, along with water pollution and foreign species.
State and federal agencies have spent millions of dollars researching the problem but have not found a smoking gun. They believe many factors are at work, and it now seems they must add ammonia to that list.
The chief concern is not whether ammonia kills fish. Instead, the volume of ammonia may have grown so large from urbanization that it is upsetting the natural food chain.
"We now have better reason to believe that it (ammonia) is perhaps an important suspect, but we still don't know exactly its role among the huge number of suspects we have here," said Anke Mueller-Solger, a CalFed lead scientist investigating the species' declines.
Ammonia is a natural byproduct of human urine and feces. In the sewage treatment process, it typically gets converted into an ionized form called ammonium. But this isn't removed by so-called "secondary" sewage treatment systems like Sacramento's.
Many other sewage treatment entities have upgraded to more advanced "tertiary" systems that do remove ammonium. But the Sacramento district maintains this higher level of treatment would cost as much as $1 billion. It is reluctant to impose that cost on ratepayers without proof that ammonia harms the Delta.
The district manages the sewage of about 1.4 million people in the capital metro area and discharges treated wastewater into the Sacramento River near Freeport.
"Overall, they're saying it's a possibility that ammonia has played a role in the shift in the ecosystem over time," said Stan Dean, district chief of policy and planning. "But they don't go so far as to specify any shifts, how they work their way up or down the food chain, whether they're good or they're bad."
The panel does not point a finger at any ammonia source. Instead, it says many sources should be investigated, including ammonia that may come from farms and wetlands.
Sacramento's ammonia discharge set a new record last year, averaging 30,780 pounds daily. It is one component of a much larger wastewater volume it pumps continuously into the Sacramento River.
The agency has an expansion plan pending before the Central Valley Regional Water Quality Control Board to handle population growth. Board officials have been keenly interested in the ammonia problem as a factor to consider in reviewing the expansion.
New round of defaults casts cloud over capital housing recovery...Jim Wasserman
We're going to find out now whether foreclosure moratoriums and new loan-modification programs will work.
Banks and mortgage lenders filed a record 11,049 new notices of default in the capital region in the first three months of 2009, La Jolla property researcher MDA DataQuick reported Wednesday. The firm cited a similar sharp rise in default notices – following a several-month lull – across all of California's foreclosure belts.
The rise in defaults came as foreclosures fell for a second straight quarter across the capital region and California.
While the sudden spike in defaults suggested another major wave of repossessed homes to further drive down home prices, some analysts counseled caution Wednesday.
Bank of America spokesman Rick Simon said some of the uptick is a resumption of processing notices of default delayed last fall and winter during an early round of foreclosure moratoriums.
"The loans that were deemed eligible for that were not advanced for foreclosure during that time," he said.
"Some is catch-up, and some is just new default activity related to job losses," said DataQuick analyst Andrew LePage.
Unemployment reached 11.3 percent in the El Dorado, Placer, Sacramento and Yolo counties region in March and is expected to top 12 percent. Statewide unemployment in March stood at 11.2 percent.
Major lenders and mortgage investors such as Fannie Mae and Freddie Mac initiated foreclosure moratoriums in October and November while awaiting the holidays and new government loan-modification guidelines and incentives. President Barack Obama subsequently outlined his Making Home Affordable program last month, offering financial incentives to lenders to refinance and do loan modifications that reduce monthly payments to 31 percent of borrowers' incomes. Many moratoriums expired in March.
Regionally, the tally of mortgage defaults almost doubled from the previous quarter in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties.
The eight-county region already has seen 37,455 foreclosures since the start of 2007 and home prices decline sharply as bank repossessions became two-thirds of sales. Now hopes run high that the defaults don't lead to a new round of foreclosures just as the area seems to be clearing out its inventory of repossessed homes.
Sacramento-area foreclosures – and those across California – dropped again sharply in January, February and March. DataQuick reported 3,881 first-quarter foreclosures in the eight-county capital region, down from 4,413 in the fourth quarter of 2008. The first-quarter tally was also well below the peak of 7,769 foreclosures in the third quarter of 2008, and lowest for the region since the end of 2007, DataQuick said.
Statewide, 43,620 people lost their homes in the first quarter, DataQuick reported, raising the number of California foreclosures to 365,000 since the beginning of 2007.
Still, the quarter's 135,431 new notices of default represent the biggest challenge for a financially challenged banking system under pressure to modify loans and stop foreclosures.
JPMorgan Chase, which bought failed thrift Washington Mutual in September, has 2,500 U.S. staffers working with struggling borrowers, and "there's still a need for extra arms and legs," said Gary Kishner, a California-based Chase spokesman.
"It's not always as simple as putting a number into a program and having it spit out information," he said.
It remains to be seen if the new loan-modification programs will ease the problems seen in earlier efforts. Borrowers have complained frequently of difficulties in dealing with loan servicers, many handling mortgages that were chopped up and sold to global investors and made by companies that no longer exist.
Meanwhile, some real estate brokers, like Ron Leis, broker-owner at Prudential NorCal Realty in Carmichael, say they believe the foreclosure slowdowns and moratoriums are simply delaying the inevitable and prolonging the housing crisis.
Anecdotally, it's believed that many Sacramento-area homeowners are living in houses for months without paying mortgages and waiting through moratoriums and processing delays for banks to finally evict them. That's created a "shadow inventory" of homes expected to come to market as foreclosures, Leis said. These houses don't show up in statistics that portray a rapid drop in for-sale inventory – usually, a positive indicator of recovery – and add uncertainty to the market.
"I felt like we were starting to feel the bottom of the market last year at this time," said Leis. "Now, we're all thinking there's going to be another big burst of these properties that could have another negative impact on prices."
But even that is not certain.
California will institute a new, additional 90-day foreclosure moratorium starting early this summer for lenders that fail to exhaust all alternatives to foreclosing on a borrower.
Editorial: Pension funds go tone-deaf on bonuses
The California Public Employees' Retirement System, CalPERS, and the California State Teachers Retirement System, CalSTRS, have already put state and local governments and school districts on notice. Public employer contributions to pension funds will rise by 2 to 5 percent of payroll over the next two years. That's a huge increase. It amounts to millions of dollars in increased costs from some local governments and billions more from the state annually, beginning next year.
The new higher retirement bills come due just as local and state governments are reeling from the economic downturn. And yet at the same time the retirement funds are demanding more from government employers, they are awarding big bonuses to their top executives, the same people who made the investment decisions and the earnings projections that turned out to be so wrong.
Together, CalPERS and CalSTRS have lost more than $100 billion in assets over the past 18 months. Nonetheless, they paid out nearly $7 million in bonuses to top employees last year. As The Bee's Jon Ortiz reported in a recent article, the biggest check, $322,953, went to Christopher Ailman, chief investment officer for CalSTRS. It almost doubled his $330,000 annual salary.
Webster's New World Dictionary defines bonus as "payment over and above salary given to an employee as an incentive or reward." What exactly is being rewarded here? Representatives for the retirement funds defend the bonuses, arguing that they are needed to attract top-flight talent. The public and local governments that will struggle to pay those bonuses have reason to be skeptical.
CalPERS and CalSTRS have been at the forefront of the shareholders' governance movement, raising tough questions about excessive executive compensation and other issues in recent years. Now they need to answer some tough questions of their own. As governments cut vital services and trim salaries and lay off workers, the millions in bonuses paid out to retirement fund executives are difficult to defend.
The California Public Employees' Retirement System, CalPERS, and the California State Teachers Retirement System, CalSTRS, have already put state and local governments and school districts on notice. Public employer contributions to pension funds will rise by 2 to 5 percent of payroll over the next two years. That's a huge increase. It amounts to millions of dollars in increased costs from some local governments and billions more from the state annually, beginning next year.
The new higher retirement bills come due just as local and state governments are reeling from the economic downturn. And yet at the same time the retirement funds are demanding more from government employers, they are awarding big bonuses to their top executives, the same people who made the investment decisions and the earnings projections that turned out to be so wrong.
Together, CalPERS and CalSTRS have lost more than $100 billion in assets over the past 18 months. Nonetheless, they paid out nearly $7 million in bonuses to top employees last year. As The Bee's Jon Ortiz reported in a recent article, the biggest check, $322,953, went to Christopher Ailman, chief investment officer for CalSTRS. It almost doubled his $330,000 annual salary.
Webster's New World Dictionary defines bonus as "payment over and above salary given to an employee as an incentive or reward." What exactly is being rewarded here? Representatives for the retirement funds defend the bonuses, arguing that they are needed to attract top-flight talent. The public and local governments that will struggle to pay those bonuses have reason to be skeptical.
CalPERS and CalSTRS have been at the forefront of the shareholders' governance movement, raising tough questions about excessive executive compensation and other issues in recent years. Now they need to answer some tough questions of their own. As governments cut vital services and trim salaries and lay off workers, the millions in bonuses paid out to retirement fund executives are difficult to defend.
Dan Walters: Stanford study of exit exam shows fallacy
California celebrates diversity and individualism as virtues, but oddly, when it comes to public education, we try to stuff 6 million students from countless ethnic, cultural, linguistic and economic backgrounds into rigidly constructed curricula and expect them to adhere uniformly to arbitrary "standards."
This approach – imposed by adults for their own reasons – manifests itself in such fallacious policies as compelling all students in some districts to take college prep classes, denigrating vocational and other nonacademic offerings and, most illogically, decreeing that no one can obtain a high school diploma without passing a so-called "exit exam."
Such one-size-fits-all policies undermine the very essence of education, which should be to provide students with widely varying aptitudes, talents, interests, aspirations and, yes, intelligences with the opportunity to develop to their fullest potentials, whatever they may be.
Not surprisingly, that approach has failed miserably. California ranks near the bottom in nationwide achievement tests of basic skills. At least a quarter of its students don't make it through high school – more than 50 percent in some districts.
Stanford University has been at the forefront of conducting deep research into California's educational shortcomings, most notably a 1,700-page study a few years ago calling for a top-to-bottom reform, which so far has been ignored by politicians whose interest in education begins and ends with money.
Stanford's Institute for Research on Education Policy has released a new study, this time zeroing in on the high school exit exam that was finally implemented a few years ago after several false starts, concluding that it's been a bust.
The study found no evidence that exit exams had elevated overall academic achievement. It did determine that female, African American and Latino students underperform on the mathematics portion of the test, while all nonwhite students do relatively poorly on the English language portion.
"The exit exam has reduced graduation rates among girls and students of color in the lowest- performing quartile by nearly 20 percentage points," says a synopsis of study findings.
One aspect of the Stanford study's findings is what researchers call the "stereotype threat," defined as the extra stress on female and nonwhite students to do well on tests, fearing that failure would confirm negative stereotypes.
California's education crisis will not be solved by quick fixes such as exit exams, no matter how superficially appealing they may be. The earlier Stanford studies showed the way – policies based on sound research into what really works in the classroom and what doesn't, backed up by enough money to provide the varied curricula that an infinitely diverse student population requires.
Schools, after all, are supposed to benefit kids – and the state – not be an arena for adults' ideological jousting.
Stockton Record
Mixed legacy mars Melones milestone
Free celebration coincides with event lamenting loss of rafting...Dana M. Nichols
ANGELS CAMP - New Melones Dam is turning 30, an event that will be both celebrated and mourned here in coming weeks.
The celebration will come Saturday, when the U.S. Bureau of Reclamation will admit visitors free to New Melones Lake recreation areas and also open the normally closed road to the dam overlook. A more solemn observance will come June 7, when whitewater recreationists who remember the pre-dam glory days of rafting on the Stanislaus plan to hold an event in Angels Camp at which they will view a historic documentary on the Stanislaus.
The dam itself is vast, standing 625 feet above the Stanislaus River stream bed, and creates California's fourth largest on-stream reservoir, with a capacity of 2.4 million acre feet. (Only Shasta, Oroville and Trinity are larger.)
But Melones looms even larger in California water history. It drowned what was once the most popular whitewater rafting run in the Western United States, as well as the West's deepest limestone canyon. And though the lake's capacity is huge, it has rarely been full and some entities holding water rights on the river, notably Stockton, have rarely received their share, triggering years of lawsuits and bickering over the merits of providing water for fish, farms and cities.
"The battle over construction of New Melones Dam was a signal that the end of the era of large dam construction had come," according to the official account of the dam posted on a U.S. Bureau of Reclamation Web site.
The dam has been an undeniable boon, however, to the agencies that hold senior water rights on the river, feeding farms and cities in southern San Joaquin County and northern Stanislaus County.
"It has been a good deal for South San Joaquin and Oakdale (irrigation districts)," said Dave Kamper, the president of the board of South San Joaquin Irrigation District.
That has translated into prosperity for the region, allowing the growth of cities including Tracy and Manteca, and irrigating high-value crops including almonds, walnuts and grapes.
"Those permanent crops are here because of the dependability of the water supply," Kamper said.
And even Stockton, which rarely is able to take its share of the water from the river, has benefitted from being able to buy surplus water from the South San Joaquin and Oakdale districts, said Mark Madison, Stockton's director of municipal utilities.
"It has allowed Stockton to greatly reduce the amount of groundwater that we pump," Madison said. "We have seen very positive results from that relative to groundwater levels under Stockton."
Yet the dam that gave wealth to some threatened the livelihoods of others.
"In 1983, one-third of our business just disappeared," George Wendt, the owner and founder of Angels Camp-based Outdoor Adventure River Specialists said of the year when New Melones finally filled, eliminating commercial rafting on the Camp Nine run of the Stanislaus River.
As a result, Wendt restructured his operation, increasing the number of trips he offered in more distant locations. Today he has operations throughout the western United States and in several countries. He said his most popular California trip is now on the American River.
The same unpredictable snowpack that has limited the water flowing from New Melones to Stockton and other users has also meant periods, such as 1990 to 1995, when the reservoir was so low that commercial rafting could resume.
Wendt said the current drought is severe enough that his firm may again offer Stanislaus trips by the end of this summer.
New Melones was designed by the Army Corps of Engineers primarily for flood control. The Corps built it between 1966 and 1979, then handed over the dam and reservoir to the Bureau of Reclamation. It replaced a much smaller dam built in the 1920s by South San Joaquin and Oakdale irrigation districts.
San Francisco Chronicle
Mortgage defaults hit record in state, Bay Area...Carolyn Said
In an ominous sign that foreclosures may soon surge, the number of mortgage default notices in California and the Bay Area rose to record levels in the first quarter of 2009, according to a report from a real estate information service.
Such notices typically precede foreclosures by a few months. The huge rise in defaults means that scores of bargain-priced bank-owned properties could inundate the struggling real estate market during the key spring and summer selling season.
"Given that foreclosures undermine price stability, this calls into question how likely it is that price stability is around the corner," said Andrew LePage, an analyst with San Diego's MDA DataQuick, which released the report Wednesday. Mark Hanson, managing director of the Field Check Group, a Menlo Park research firm specializing in mortgages and housing, said the downward pressure on prices will be significant.
"Most of these defaults at some point will end up as foreclosures," he said. "You'll see a massive wave hitting right during the peak selling months."
Notices of default sent to delinquent borrowers totaled 135,431 in California and 19,438 in the Bay Area from January through March, DataQuick said. Those totals were up 19 percent and 17.6 percent, respectively, compared with the same period last year.
Part of the increase is pent-up demand after some temporary delays. In September, California enacted a law requiring lenders to take additional steps during a foreclosure, which slowed the process. In addition, many banks implemented foreclosure moratoriums in late 2008 and early 2009 in advance of the Obama administration's housing rescue plan, which was announced in February.
Those moratoriums have now expired, and in coming weeks banks will review how many of their struggling borrowers qualify for relief under the plan - and are likely to foreclose on those who do not.
Some of the increase could also be due to the faltering economy.
"So far this year, we've seen a lot more people fall behind on their payments because of job losses," LePage said. "We're in a really nasty recession and don't know how deep the job losses will be."
The number of actual foreclosures declined in the first quarter, but experts agree that was due to the moratoriums and the new California law, not to any meaningful change that would signify an end to the housing crisis.
In California, 43,620 homes were repossessed by lenders in the year's first three months, 7.6 percent fewer than the same time last year. For the Bay Area, the total was 6,050 foreclosures, down 9 percent.
The big unknown is what effect the administration's housing rescue plan ( www.makinghomeaffordable.gov) might have. The plan offers incentives for lenders to modify mortgages to make them more affordable for struggling borrowers.
Alan White, a law professor at Valparaiso University in Indiana who has studied loan modifications, said he thinks the plan will help, but has some gaps that will limit its usefulness.
"It doesn't deal very well with people who have significant negative equity," he said. Studies have shown that more than one-fifth of all mortgaged properties nationwide are in that situation of owing more than the house is worth.
"It also doesn't really deal with second mortgages, which affects a fairly significant number of mortgages that are in foreclosure," he said. "One servicer said about 10 percent of their borrowers in foreclosure could benefit from the new Home Affordable plan. I'm hopeful it will be a little more than 10 percent, but I think there are serious limitations."
Hanson, of the Field Check Group, also pegged the number of delinquent borrowers who will qualify for a modification at about 10 to 15 percent.
"People are hoping that Obama's house saver plan will kick in and abort the new wave of foreclosures," he said. "There is just no way. There is a pig the size of Godzilla in the foreclosure python."
Overall, Hanson said, the impact of the foreclosure moratoriums and California's law will prove to be minimal.
"We just kicked the can down the road, spreading the foreclosures out over a longer period of time," he said.
Contra Costa Times
Scientists rip federal agencies for implementation of landmark Delta, salmon protection law...Mike Taugher
California's federal water managers favored farmers over the needs of salmon and failed to take seriously a law that was supposed to overhaul the state's water delivery system and improve the environment, an independent scientific review of the 17-year-old law says.
The report casts a harsh light on the two federal agencies charged with implementing the 1992 Central Valley Project Improvement Act and said the science panel was "flabbergasted" at how agencies reduced the amount of water that was supposed to shift under the law from farms to fish.
Nearly $1 billion spent led to some improvements, the panel said.
But while salmon populations collapsed and the Delta ecosystem spiraled downward, federal agencies let the programs that might have slowed or reversed the declines languish at low levels in their bureaucracies, isolated from each other and from state-led efforts to address the Delta's numerous problems.
"This suggests the CVPIA program is not viewed as a high priority within either agency or Department of Interior as a whole," said the report, which was requested by the U.S. Bureau of Reclamation and the U.S. Fish and Wildlife Service.
The act, signed by the first President Bush, was meant to be a sweeping reform of the 76-year-old Central Valley Project that should have doubled salmon populations, redirected water to environmental purposes and created a fund for habitat improvements.
It was considered the top
Mercury News
Report: Reckless mortgage lending in late 2006 fueled California default wave...Sue McAllister
A new report pinpoints late 2006 as the time when the California mortgage market was most out of control — with some mortgage lenders acting so recklessly that two-thirds of the loans made during that time ended up in default.
The report by MDA DataQuick provides grist for those who say the industry needs greater regulation to avoid repeats of the subprime mortgage lending debacle.
More than 9 percent of California mortgages originated from August to November 2006 have resulted in lenders filing default notices, according to DataQuick, a real estate information firm. By comparison, the default rate for all the loans made in 2005 is 4.9 percent, the company said, and for 2004, it was less than 1 percent.
But several lenders had a particularly large portion of their loans from that period land in foreclosure, the company said: The three whose loans went south in the largest proportions were ResMAE Mortgage (70 percent), Master Financial (65 percent) and Ownit Mortgage Solutions (64 percent), DataQuick said.
ResMAE originated just under 3,500 loans in California in the four-month period in 2006, Ownit made about 3,130, and Master made 1,240, DataQuick said.
Many loans made by smaller lenders during the housing and credit booms were later sold to other investors, leaving the lenders with little "skin in the game" when borrowers failed to pay.
"Many, if not most, of the loans made in 2006 are owned and/or serviced by lending institutions other than those that made the loans," the DataQuick report said.
DataQuick's John Karevoll called mid- to late 2006 a "pocket of nastiness" in the state's lending industry, during which many lenders were making loans that had multiple risks — for example, no-money-down loans that also required no verification of the borrower's income. As a result, too many borrowers could not afford their loans and have defaulted or been foreclosed upon.
"This whole process, at least for a while there, just broke down," Karevoll said. "There was nobody out there minding the store."
Ownit, based in Agoura Hills, and Master Financial, based in Orange, have gone out of business. ResMAE is still operating, but under different ownership. No one at ResMAE, which has a mailing address in Kansas, could be reached for comment Wednesday.
Some say clueless or opportunistic borrowers bear responsibility for the housing bubble and its burst. But, said Ginna Green, a Bay Area spokeswoman for the Center for Responsible Lending, "You can't put 70 percent of loans failing only on the borrowers' shoulders. When we have failure rates that look like this, it indicates a stunning failure in the regulatory framework."
The Center for Responsible Lending and other consumer advocates have called for laws that would impose national licensing standards on mortgage brokers as well as help ensure that borrowers can afford and understand the loans they are taking.
Green said the DataQuick figures "are so overwhelming, it's proof something was wrong with the subprime market."
Said Dustin Hobbs of the California Mortgage Bankers Association, an industry trade group: "It's no coincidence that these companies are out of business" based on the lending standards exhibited by their default rates. But, he said, "There certainly is blame on both sides. Even borrowers who got loans they couldn't afford, they have to take some responsibility as well.
"There's more than enough blame to go around when default rates are that high."
A spokesman for California Attorney General Jerry Brown, Scott Gerber, said he could not comment about whether any of the companies named in the DataQuick release were being investigated for illegal lending practices, but said there were no closed settlements with any of them.
In fall 2008, Brown announced an $8.7 billion settlement with Countrywide Home Loans over lending practices the attorney general said were habitually deceptive. Gerber said prosecuting housing industry "scam artists" remains a priority for Brown's office.
DataQuick's report, like several others released recently, showed the number of California and valley homeowners behind on their mortgages spiked in the first quarter of this year following a period in which many lenders voluntarily opted to stall foreclosure proceedings.
Statewide, notices of default — which are the first step in the foreclosure process — rose to 135,431 in the first quarter of 2009, up 80 percent from the previous quarter and up 19 percent from the first quarter of 2008. In Santa Clara County, defaults increased 95 percent from the fourth quarter, and 33 percent from the first quarter of 2008. A total of 4,090 notices were issued in the county in January, February and March.
Los Angeles Times
Scientists, supporters rally at UCLA for animal research
Participants protest the violent acts of some opponents and tout the benefits of the research. A smaller group of critics of such studies also rallies...Larry Gordon and Raja Abdulrahim
Led by a professor whose car was set on fire last month in an anonymous attack, more than 400 UCLA scientists and their supporters rallied on campus Wednesday to defend research using animals and to protest the violent tactics of some opponents.
At almost the same time, about 40 critics of animal research demonstrated just across Westwood Boulevard from the pro-research gathering, and the two groups briefly traded slogans before marching to different UCLA plazas. Police reported no violence and no arrests.
With signs proclaiming, "Research Yes, Terror No," the larger rally was organized by UCLA neuroscientist J. David Jentsch. Police say Jentsch's car was destroyed by animal rights extremists near his home March 7 because he uses and sometimes kills vervet monkeys in research on schizophrenia and drug addiction. That incident, in which no one was injured, was the latest in a string of arson attacks and threats against UCLA scientists since 2006.
Jentsch said his rally's comparatively large turnout showed that many people wanted to speak out against the attacks and for the medical advances that he said animal research produces.
"Look around you and you will see the brightest minds on the West Coast on this street, right now. They are all here to support this cause," said Jentsch, who recently founded UCLA Pro-Test, which backs what it calls humane, regulated animal research.
Among the marchers was Dana Gant, who carried a placard that read, "Animal Research Saved My Mom," a reference she said was to new medicines that helped her mother survive breast cancer.
A UCLA researcher who uses mice and rats in seeking cures for Alzheimer's disease, Gant said she also attended the rally to decry anti-research violence, which she said shows "a lack of respect for human life."
This week, authorities announced the felony indictments of two people for allegedly harassing and threatening UCLA researchers, but no one has been charged in the most serious incidents, involving arson and vandalism. On Wednesday, authorities announced that the reward offered for information leading to an arrest and conviction in the Jentsch car burning had been increased to $75,000.
Besides Jentsch, speakers at the rally included Tom Holder, a leader of Pro-Test, a British group formed at Oxford University in 2006 in support of research, and UCLA professor Lynn Fairbanks, an animal behavior expert who has been a target of threats.
It was clear Wednesday that some UCLA researchers remained frightened by the possibility of violence. Some marchers declined to give their names, saying they did not want to be targeted by extremists. "I have children," said one psychology professor.
The animal rights activists, who were marking an annual observance of World Laboratory Animal Liberation Week, marched toward the UCLA student union. They chanted such slogans as "Monkey abuser" and "Murderer."
Speaker Michael Budkie, executive director of the Ohio-based Stop Animal Exploitation Now, described the use of animals in research as "inherently cruel and inhumane," as well as unscientific, because animals do not accurately predict human physiology, he said. He also said UCLA maintains the experiments to garner large research grants and support hefty salaries, contentions the university denies.
Budkie said he supported only peaceful protests; on the advice of his attorney, he said, he declined to discuss the anti-research violence. Jentsch's supporters, Budkie said, "have as much right to express their opinion as we do to express ours."
Jill Ryther, a third-year UCLA law student and member of a student group opposing the research told the gathering: "The fact is these atrocities are happening here on campus, and as a student I'm embarrassed."
Jim "Jingles" Chovanec, 62, who described himself as a retired civil service worker from Ventura, wore a monkey suit and chains, and entered a small cage during the rally.
Chovanec said he suffers from nightmares about lab animals being tortured, describing them as "the innocent and the helpless." He said the only way to legitimize animal research would be if scientists "could get the animals' permission to do the experiments, but that is not going to happen."
Mortgage defaults rise but homeowners stay put
More Californians are missing their mortgage payments -- some deliberately -- but fewer are having their homes repossessed...William Heisel
More Californians are failing to make their mortgage payments than at any time in the last 20 years, but fewer of them are losing their homes, according to new figures.
The drop in foreclosures follows moratoriums adopted by major banks and mortgage giants Fannie Mae and Freddie Mac. The increase in loan defaults, meanwhile, suggests that rising unemployment and the continuing recession are still claiming fresh victims.
But another factor in the soaring default rate could be that some struggling homeowners are purposely skipping their payments so that they can get their loans refinanced, industry experts say.
Lenders are so backlogged with requests to adjust loan terms that "they focus on the borrowers who already are circling the drain and ignore the people who are keeping up with their payments," said Jeff Lazerson, president of Mortgage Grader, a Laguna Niguel loan broker.
Lynne Neagle, 73, of Westminster may be a case in point.
Neagle said she and her husband had trouble paying their mortgage, but their loan servicer ignored their pleas to renegotiate terms -- until they quit paying, that is.
Suddenly, she said, they were presented with new ways to lower their payments and are currently negotiating new terms through the Hope Now program set up by the federal government and some of the country's largest mortgage lenders.
"Before we stopped making our payments, nobody wanted to deal with us," Neagle said. "We stopped paying, and that really got their attention."
A default notice is the first step in the foreclosure process, and California homeowners received 135,431 of them in the three months ended March 31, MDA DataQuick of San Diego said Wednesday.
That's an 80% increase over the previous three-month period and a 19% jump over the same period last year.
Meanwhile, the number of actual foreclosures, in which the home was repossessed by the lender, fell to 43,620 in the first quarter, a 6% drop from the last three months of 2008 and a 7.6% decline from the year-earlier quarter. Foreclosures peaked in the third quarter of 2008 at 79,511.
Much of the drop stems from a change in state law that made it more cumbersome for lenders to foreclose, DataQuick analysts said. That also led to procedural delays for banks and other lenders, which in many cases were not prepared to handle the additional paperwork.
"Some of these outlets weren't staffed enough to process all these loans, and so they had this huge backlog that we're starting to see work its way through," said Andrew LePage, a DataQuick analyst. "There's also a chunk of it that could be the lender pushing the borrowers into default to get the modification rolling or the borrowers doing it themselves to qualify."
Nationally, foreclosure numbers also have fallen.
Data firm RealtyTrac of Irvine said Wednesday that the number of homes taken over by banks dropped to 190,543 in the first three months of the year, a 13% decrease from the last three months of 2008. Defaults jumped 10% over the same period, to 306,785.
Late last year, the country's two biggest buyers of home loans -- Fannie Mae and Freddie Mac -- stopped foreclosures on many of the loans under their control. Citigroup Inc., JPMorgan Chase & Co., Bank of America Corp., Morgan Stanley and Wells Fargo & Co. all followed suit, saying they wanted to give President Obama time to work out the details of his housing plan.
Those moratoriums have tapered off. Fannie and Freddie announced at the beginning of April that they would begin foreclosing on homes again.
The various federal efforts now underway do offer some incentives for banks to help homeowners in default -- including a $1,000 payment to loan servicers for every successful loan modification.
But the incentives are even better for loans that are current -- $1,500 in those cases. And the centerpiece of Obama's plan, the Homeowner Affordability and Stability Program, is aimed at people who are current on their loans.
But many troubled borrowers in California are not eligible for help under Obama's plan because they owe much more on their loans than their homes are worth. To qualify for one of Obama's programs, a mortgage's balance must be no more than 105% of the value of the home.
"California loans are so far underwater that people won't fit into that narrow window," said David Leibowitz, a bankruptcy and foreclosure attorney at Lakelaw in Chicago.
With the unemployment rate -- now 8.5% nationally and 11.2% in California -- expected to continue rising, economists believe more people will be struggling to make their mortgage payments, leading to a continued uptick in defaults. But foreclosures won't necessarily follow the same trend, experts say, because banks don't want to overtax a housing market already flooded with cut-rate properties repossessed by lenders.
"If they can work something out with a borrower, they are going to try to work it out because they don't want to recognize these losses," said Steve Hable, a loan modification administrator who works for San Diego attorney and AM radio show host Jeff Isaac. Isaac has been holding seminars encouraging people to hire attorneys like himself to help them through the loan modification process. He said that when he meets with struggling borrowers, he finds that getting the bank's attention has been one of their biggest problems.
"There is so much confusion out there," Isaac said. "And people end up making really bad decisions, like borrowing against their 401(k) to make their house payments. You do that and you are destined for real misery down the road."
The demand for modifications has become so pressing that Bank of America, which services more home loans than any other company, said last week that it had 6,400 employees working on mortgage restructurings.
Neagle and her husband were close to paying off their home loan in the early 1990s when they decided to refinance and take out some equity to help pay for their son to study aerospace engineering at Cal Poly Pomona.
He earned his bachelor's degree in 1999, but the Neagles ended up with about $600,000 in debt and, as the housing market started to crash, a home that was worth only a little over $400,000.
They tried to talk with their loan servicer, American Servicing Co., which is part of Wells Fargo, about a modification but were rebuffed, said Neagle, who works for Wells Fargo as a collateral specialist in Irvine.
"I guess it's good that it didn't matter where I worked," she said. "It means they treat everyone the same."
March existing home sales fall...Associated Press
WASHINGTON -- A real estate group says sales of previously occupied homes sank by an unexpectedly large amount from February to March, dashing hopes of a spring housing recovery.
The National Association of Realtors said today that home sales fell 3 percent to an annual rate of 4.57 million last month, from a downwardly revised pace of 4.71 million units in February. Sales had been expected to fall to an annual pace of 4.7 million units, according to Thomson Reuters.
The median sales price plunged to $175,200, down 12.4 percent from $200,100 a year earlier, but up from $168,200 in February. While median sales prices typically rise slightly in early spring, the 4 percent monthly increase was larger than expected.
Washington Post
Cement industry: EPA pollution plan not achievable...JOHN FLESHER, The Associated Press
TRAVERSE CITY, Mich. -- A group representing the U.S. cement industry says a federal government plan for cutting emissions of mercury and other air toxins at its plants is unrealistic.
The Portland Cement Association said Wednesday a regulation drafted by the Environmental Protection Agency would cause some plants to close. The group said there would be shortages of cement, the key ingredient in concrete.
The industry also predicted more cement imports from countries with weaker standards.
EPA's proposed rule would require the nation's 99 cement plants to make steep reductions in releases of pollutants such as mercury, hydrochloric acid, hydrocarbons and soot.
The agency says cement kilns are America's fourth-largest source of airborne mercury. It says the proposed limits would save up to 1,600 lives a year.
New York Times
Administration Stops Short of Endorsing Climate Bill...JOHN M. BRODER
WASHINGTON — Obama administration officials said Wednesday that an ambitious energy and climate-change proposal sponsored by House Democrats could help create jobs and reduce greenhouse gas emissions, but they stopped short of endorsing it.
Steven Chu, the secretary of energy, and Lisa P. Jackson, the administrator of the Environmental Protection Agency, told a House committee considering the measure that they believed it could help accomplish President Obama’s goals of moderating climate change, spurring clean-energy technology and reducing dependence on foreign oil.
Yet both said they were still studying the details of the 648-page draft, unveiled late last month by two Democratic lawmakers, Representatives Henry A. Waxman of California and Edward J. Markey of Massachusetts. In fact, Dr. Chu and Ms. Jackson said that they had not read the entire draft and that the administration had not given its blessings to the bill. They said they would work closely with Congress to help fashion acceptable legislation.
The House measure, the most far-reaching piece of energy and environmental legislation to come before Congress in years, would require large changes in the way the United States generates electricity, manufactures products, heats and lights its homes and offices, and moves people and goods.
One central provision would establish a cap-and-trade program to limit greenhouse gas emissions. Mr. Obama has repeatedly pushed the idea of a cap-and-trade plan as part of any eventual measure — he did so again Wednesday at an Earth Day observance in Iowa — but he and his senior aides have left the details to Congress.
Mr. Waxman, chairman of the House Energy and Commerce Committee, where Dr. Chu and Ms. Jackson testified Wednesday along with Transportation Secretary Ray LaHood, has begun a month of intensive work on the legislation with the announced goal of moving it through the committee by late May. The panel will hear from 67 witnesses this week and will begin subcommittee work next week.
Mr. Waxman faces vocal skepticism from most Republicans on his committee, several of whom complained at Wednesday’s hearing that the bill would drastically raise energy costs and lead to large job losses. They also said Mr. Waxman was moving too quickly on a measure with such profound consequences.
Representative Fred Upton, Republican of Michigan, called the legislation a “cap and tax” proposal that would “kick working families when they’re down.”
But Mr. Waxman and other Democrats cited an E.P.A. study issued on Tuesday that said the bill would have a negligible effect on the American economy and consumers’ pocketbooks.
Ms. Jackson said the Waxman-Markey measure would impose “modest costs compared to the benefits.”
While the committee will be exposed to hour upon hour of such argument from lawmakers, government officials, industry executives, academics and environmental advocates over the next days and weeks, the real action on the bill is going on behind the scenes.
Under any sort of cap-and-trade scheme, government sets an overall limit on emissions while allowing companies to trade permits, known as allowances, to pollute. But the House draft does not address two central issues. First, it does not say how many of the allowances the government will give away, if any, and how many it will auction. Democrats from states dependent on coal and manufacturing are asking that a sizable portion of the allowances be granted free, to mitigate the costs of the carbon cap.
Second, the legislation does not say what will be done with the proceeds of any auction of permits, estimated in Mr. Obama’s budget proposal to be worth at least $65 billion a year.
Negotiations are under way to resolve those questions, and the answers will determine how many Democrats ultimately support the bill and whether any Republicans do.
Those financial issues will also be crucial to winning support in the Senate, where on Wednesday two unlikely bedfellows announced legislation requiring the E.P.A. to conduct a study on the environmental effects of so-called black carbon, the soot that lands on Arctic ice and other reflective surfaces and contributes to global warming.
Senators John Kerry, Democrat of Massachusetts, and James M. Inhofe, Republican of Oklahoma, who are usually about as far apart on environmental issues as it is possible to be, are among the sponsors of the bill. They called black carbon a “dangerous pollutant” emitted by old, dirty diesel engines and the burning of wood, peat and dung. They said it was thought to be the second-largest cause of global climate change, after carbon dioxide.
CNN Money
A wave of homebuilder consolidation?
With an industry on the ropes, analysts say more companies will join forces - some to grow, some just to survive...Janet Morrissey
NEW YORK (Fortune) -- When Richard Dugas, the president and CEO of Pulte Homes Inc. recently talked about his company's $3.1 billion purchase of rival Centex Corp., he added fuel to the fire for a possible wave of consolidation in the battered homebuilding sector.
"This is the right combination at the right time," Dugas told analysts when the deal was announced earlier this month. "As the industry prepares for further consolidation, we believe acting first gives us an advantage."
Now analysts and investors are placing bets on which marquee names might be next for a hook-up - and which ones will close their doors.
Large, well-capitalized homebuilders with low debt, such as D.R. Horton Inc., (DHI, Fortune 500) KB Home (KBH), and Pulte (PHM, Fortune 500) - as well as cash-flush private equity firms - will likely be shopping around, while highly leveraged builders with significant chunks of debt coming due in the next three years are likely targets, industry experts say.
Like companies in just about every other industry, homebuilders are having a tough time refinancing in the frozen credit markets. As a result, distressed builders, unable to meet debt calls, could be forced to sell assets or the entire company at bargain-basement prices.
Builders with debt-to-market cap ratios above 75% include Beazer Homes USA Inc. (BZH), Hovnanian Enterprises Inc. (HOV), and Standard Pacific Corp. (SPF), according to Bob Curran, managing director at Fitch Ratings. Their high debt makes them vulnerable to takeouts if the credit markets don't improve in the next two years, experts say.
Builders on the hunt may also be looking for strategic targets. Toll Brothers Inc. (TOL) has a robust balance sheet, but its strong brand name and leadership in high-end housing could make it an attractive buy for a company wanting to expand into the luxury sector, says Stephen Kim, senior real estate analyst AT Alpine Woods Capital Investors LLC, which holds shares in homebuilding stocks including Toll Brothers.
KB Home could fit well with Ryland Group Inc. (RYL) which shares a similar market cap and business strategy, says UBS analyst David Goldberg. But, he notes, "Who knows if KB wants to be acquisitive?"
Then there's D.R. Horton, which could acquire another company to regain its position as the country's largest builder. "There is a certain empire-building nature to this industry, and people want to be the biggest, and you can't be the biggest picking up pieces of raw land or buying private builders - you can't get scale fast enough. So that might push people to do deals" says Goldberg.
Too much too soon?
Most industry experts believe consolidation will accelerate, but many wonder if Pulte might have jumped in prematurely and overpaid for Centex (CTX, Fortune 500).
"We have always felt that there would be additional consolidation in the industry - just not right yet," said Joe Snider, vice president and senior credit officer at Moody's Investors Service in New York. "We're in the middle - we're not at the end yet - of a very deep and long-lasting downturn."
Based on Pulte's closing price on April 7 just before the deal was unveiled, the transaction valued Centex at $10.50 a share, which represented a 38% premium to its closing price of $7.62.
"My gut would tell me that what Pulte paid was a little bit high," says Goldberg. If the market rebounds and prices go up, "Pulte will look like geniuses for buying a big land position at the bottom of the market," he says. But if the market tanks for two or three more years, he believes the merger will be viewed as ill-timed.
Although traffic and sales have improved for homebuilders since February, it's not clear if the Pulte/Centex union is a blip or the beginning of a trend, says Carl Reichardt, an analyst with Wachovia Capital Markets LLC.
Indeed, plunging home prices, rising inventory, surging foreclosures and the frozen credit markets have decimated the housing sector. Home prices are off about 30% on average from their peak in 2005, with once-hot markets such as Las Vegas, Phoenix, and parts of Florida and California tumbling 50% or more, says Kim. "And we're looking for another roughly 10% decline in home prices" this year, he says.
As a result, the nation's publicly-traded homebuilders have slashed prices, boosted incentives and taken roughly $30 billion in writedowns during this period, says Snider. Homebuilding stocks have plummeted 88% from their peak in 2005 until their trough in November 2008, according to Kim. Although they've rallied 6.5% so far in 2009, they're still off about 79% from their peak, he says.
Casualties of the housing bust
Analysts expect a number of distressed builders to exit the market through bankruptcy filings, mergers or fire-sales in the next year or two.
So far, about 17 of the country's top 100 homebuilders - including three publicly-traded builders - Levitt & Sons LLC, WCI Communities Inc., and Tousa Inc. - have filed for Chapter 11 bankruptcy protection over the past two years, says Reichardt. More recently, Comstock Homebuilding Cos. Inc. indicated it may seek bankruptcy protection
Publicly-traded builders, in general, are better capitalized than their rivals in the private sector. Many learned tough lessons from the crippling downturn almost 20 years ago where high debt and inventory levels pushed a flurry of builders into bankruptcy.
Some of the names that survived this rocky period, such as NVR Inc. and M.D.C. Holdings Inc., have among the lowest debt levels and land holdings today. "They learned a bitter, but very wonderful, lesson," says Snider. "They're the best positioned homebuilders today."
Still, many companies are at risk. "Some of the weaker public builders have already gone, and there may be more to go," says Kim. And that's where the well-capitalized players can step in, but they may be best suited to hold off a while longer.
"This is the arguably the worst downturn since the end of World War II and more severe than the late '80s and early '90s," says Curran. "Most parties will probably tend to wait until it's clear that a bottom has been established, and into the early stages of the upside," said Curran.
"I don't think anybody should feel rushed here," said Kim. "But I think they will look and they are looking." 
Jobless claims bounce higher
Number of initial unemployment filings reverts to higher levels after one-week dropoff. Mass layoffs hit record high...Julianne Pepitone
NEW YORK (CNNMoney.com) -- The number of initial claims for unemployment insurance rose last week, with the number of people collecting benefits overall climbing to a record 6.14 million, according to a U.S. government report released Thursday.
In the week ended April 18, there were 640,000 initial jobless claims filed, up from a revised 613,000 the previous week, the Labor Department said. There had been a sharp decline of 47,000 in the previous week.
Economists expected 639,000 new claims, according to a consensus survey by Briefing.com. The 4-week average of initial claims fell 4,250 to 646,750.
"The recent slowing in the rate of increase of claims looks more like a correction from a period of unsustainably rapid increases than the early signs of a real turning point," wrote Ian Shepherdson, economist at High Frequency Economics, in a research note.
He noted that claims as a proportion of the labor force remain well below peaks seen in the 1980s, asking, "What is to stop layoffs from rising at a slower pace for an extended period?"
In a sign that more people are having trouble finding work, a record 6,137,000 continued filing for unemployment insurance in the week ended April 11, the most recent data available. That's an increase of 93,000 from the previous week.
The 4-week average of continuing claims rose 142,500 to 5.94 million.
State highs and lows
Earlier this month, the government reported two million jobs were lost through March 2009, bringing the nation's unemployment rate to the 25-year high of 8.5%. The nation has lost 5.1 million jobs since th
The largest increases were in Florida, with 9,303; Pennsylvania, at 7,538; California, at 6,404; Wisconsin, with 3,611; and New York, 3,581. Those spikes were likely due to layoffs in the construction, trade, service and manufacturing industries, among others, the report said.
By contrast, 16 states had claims decrease by more than 1,000. Michigan reported 12,566 fewer claims, which a state-supplied comment attributed to fewer layoffs in the automobile industry.
Mass layoffs hit record high
The number of layoff announcements involving at least 50 workers rose in March to the highest level since the Bureau of Labor Statistics began keeping records in 1995, the government said in a separate report Thursday.
There were 2,933 mass-layoff actions, up 164 from February, the report said.
Overall, the number of initial claims for unemployment benefits related to mass layoffs rose by 3,911 to 155,909.
April 24 - S.J. Valley Reg. Planning Agencies’ 
Directors’ Committee...9:30 a.m.
May 01 - Citizens Advisory Committee Meeting
May 07 - Technical Planning Committee Meeting

May 13 - Technical Review Board Meeting
May 21 - Governing Board Meeting