California lost close to half of its construction jobs when the housing bubble burst.

The nation’s most populous state was an epicenter of the national housing bust. From June 2006 through last month, it lost 43% of its construction jobs, or 401,900 positions. That far outpaced a 28% decline in total U.S. building employment during the same period.

Interesting report from the 2008-2009 SANTA CLARA COUNTY CIVIL GRAND JURY .
A tidbit is the Six-figure dismissal buyouts for Fremont Union High School District presumably referring to 2006 replacement of Superintendent Dr. Stephen R. Rowley with Superintendent Polly Bove; the former filed a wrongful termination lawsuit against the district subsequently.

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WHO REALLY BENEFITS FROM EDUCATION DOLLARS?
(Hint: It’s Not the Students)

Issues

•
Are the school Boards of Trustees in Santa Clara County good stewards of our
education dollars?
•
Is the money allocated to education directly benefiting the children in the
classroom, or Superintendents/Chancellors, Boards of Trustees and Attorneys?
•
Does our county really need 34 elementary and secondary school and four (4)
community college districts to provide our students with a quality education?
•
Are the cumulative compensation and benefits provided to Boards of Trustees
and Superintendents/Chancellors overly generous?
Summary

Investigations by the 2008-2009 Civil Grand Jury brought to light instances of excessive
school district spending. There are citizens’ complaints, reports of significant budget
problems, and unusual contract buyouts. These and other issues pertaining to district
finances compelled the Grand Jury to conduct this investigation. This effort involved the
review of publicly available information (contracts, expense reports, financial
statements, audits, etc.) and interviews with district personnel.

All schools are facing unprecedented financial crises, creating the prospect of severe
budget cutbacks. For example, prior to the May 19, 2009 special election, Governor
Schwarznegger had already proposed deep cuts…..”Billions of dollars would be cut
from K-12 schools, potentially shortening the school year by a week, while financial aid
for college students would be reduced.” {Sacramento (AP) May 26, 2009} These cuts
will likely result in major staff reductions (teachers, counselors, librarians and other
support staff), increased class size, elimination of numerous programs (sports, arts and
music) and other extracurricular activities.

Despite the draconian budget cuts facing the schools in the coming months, there
appears to be little inclination on the part of the Districts to reduce or even limit the
amounts paid to Superintendents/Chancellors, Assistant Superintendents, Presidents,
and Boards of Trustees. It is difficult to understand or support continuing these
generous administrative expenses, while at the same time teachers, staff and programs
are being cut.

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(more)

Definitely a well paying job.
So are Cupertino School Superintendents who are paid close to $300M per year, more on this later.

At a time when California school board members were agonizing over laying off employees, slashing programs and imposing furloughs, the man who was the boards’ public face earned $1.61 million over four years.

CSBA, a nonprofit organization with a $16 million annual budget, including $5.9 million in member dues paid by nearly 1,000 school boards, initially refused to release financial information.

Is the mini rebound over ?

San Mateo County saw 463 sales of single-family resale homes, the lowest for a July in 20 years. In Santa Clara County, the 1,159 single-family resale homes that closed escrow represented a drop of 24.3 percent from the 1,531 sold a year earlier, making this the second-slowest July since 1990, according to figures released Thursday by the real estate information service MDA DataQuick.

This didn’t take long to return.

Mortgage fraud takes many forms, but a well-organized scam frequently involves a limited liability company (LLC) or a “straw buyer.” In this scheme, fraudsters use a fake identity or that of someone else who allows them to use their credit status in return for a fee. The seller pockets the money the buyer borrows from a lender to pay for the home. The buyer never makes a mortgage payment and the property goes into foreclosure.

e property appraisal — compiled by an appraiser who Scott believes never visited the area — showed four nearby comparable properties of around the same age (100 plus years) sold recently for around $360,000. The trick to this kind of scheme is engineering the sale of the first few fraudulently overvalued properties to get “comps” — comparable values — to fool appraisers and underwriters alike.

“Miraculously, all of these properties were all within a very narrow price range,” Scott said with weary sarcasm. “This is a perfect appraisal for an underwriter. If you are an underwriter sitting in Kansas or California it all looks fairly straightforward so you can just hit the button and approve it.”

Certainly bad news for the city’s tax revenues, but this could lead to more development.

Several thousand are employed in HP’s Cupertino campus, these jobs will be relocated to Palo Alto.

Both facilities are only half occupied as the local tech sector stalls.

Of all the lots in Cupertino, this one has to take the cake for oddest of them all.

10081 PENINSULA Ave Cupertino, CA 95014
Beds: 3
Baths: 2.5
Sq. Ft.: 1,525
$/Sq. Ft.: $616
Lot Size: 8,504 Sq. Ft.
Property Type: Detached Single Family
Style: Mediterranean
Stories: 2
Year Built: 1997
On Redfin: 84 days

Commercial real estate loans are being extended as the financial industry refuses to accept reality.
When banks are allowed to mark to imaginary, this is what ensues in a repeat of Japan’s debacle.

A big push by banks in recent months to modify such loans—by stretching out maturities or allowing below-market interest rates—has slowed a spike in defaults. It also has helped preserve banks’ capital, by keeping some dicey loans classified as “performing” and thus minimizing the amount of cash banks must set aside in reserves for future losses.

Restructurings of nonresidential loans stood at $23.9 billion at the end of the first quarter, more than three times the level a year earlier and seven times the level two years earlier. While not all were for commercial real estate, the total makes clear that large numbers of commercial-property borrowers got some leeway.

The PACE “Green home” program is dealt a fatal blow. It’s interesting to note the Inland Empire municipalities in So Cal have been leading the nation in driving this program.

PACE lets homeowners use special property-tax assessments to pay off, over 15 to 20 years, the cost of new improvements. Local governments sell municipal bonds to fund it.

In May, Fannie and Freddie said the liens violated the terms of their contracts to purchase loans from lenders and said they would require borrowers to pay off the liens before refinancing or selling their properties. The announcements, which raised concerns that borrowers would have to pay off their mortgages early, led most municipalities to suspend their PACE programs.

These cases are a glimpse into the world of mortgage fraud.
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Some of the significant federal prosecutions filed as part of Operation Stolen Dreams
include the following:
United States vs. Anthony Symmes

On May 28, 2010, Symmes pleaded guilty to mail fraud conspiracy and money
laundering in connection with a large-scale builder-buyout mortgage fraud scheme. For many
years, Symmes was the largest homebuilder in Chico. In 2006, as the market cooled, Symmes
had a significant amount of unsold new homes in inventory. Symmes established relationships
with several unlicensed mortgage brokers to “sell” his homes to straw buyers at inflated prices.
The entire reported purchase price was 100% financed on each home with various subprime
lenders. Typically, the day after escrow closed, Symmes then rebated $40,000 to $60,000 of the
reported purchase price per home to shell companies controlled by the buyers’ agents. The
rebates were not disclosed to the lenders. Altogether, from 2006 through 2008, Symmes sold 62
homes with undisclosed sales rebates. The homes were financed in the aggregate amount of $21
million. To date, 38 of the homes have fallen into foreclosure and 10 more have been the subject
of short sales, causing losses to date of $5 million. Symmes has pleaded guilty, is presently
cooperating in an ongoing mortgage fraud investigation, and has already paid $4 million toward
restitution/forfeiture. He is currently scheduled to be sentenced on September 3, 2010.

United States vs. Garret Gililland, et al.

Cr. S 08-0376 EJG

This morning, a federal grand jury returned a second superseding indictment against
Garret Griffith Gililland and Nicole Magpusao who were originally charged in 2008 with mail
fraud and other charges relating to a multimillion dollar “builder bailout” mortgage fraud scheme
in Chico. The new charges add eight defendants with participation in that scheme or related to it.
Chico-area homebuilder William E. Baker; Nor Cal Innovative Investments Inc. president Shane
Burreson; Leonard Williams, a licensed real estate professional; Christopher M. Chiavola,
Brandon Resendez, Niche Fortune, and Kesha Haynie –all former employees of Gililland and
Burreson; and Remy Heng. According to the new indictment, Gililland, Burreson, Chiavola,
Resendez, and Williams recruited various individuals to purchase residential real properties.
Gililland and his associates acted as the mortgage broker and real estate agent in connection with
the transactions. Gililland, Burreson, and others assisted in obtaining residential loans for the
transactions causing materially false loan applications to be prepared on behalf of the purchasers.
Gililland, Burreson, Chiavola, and others arranged with the sellers of the properties to purchase
the properties at a price above the true market price. The defendants also arranged to credit a
percentage of the margin between the actual market price and the inflated purchase price of the
properties after the close of escrow to various bank accounts controlled by defendants. At the
same time, defendants caused the credits to be concealed from the lenders. As a result of the
scheme to defraud, lenders issued loans in an aggregate amount of approximately $21 million.
Bank accounts controlled by Gililland, Burreson, and others, received over $2 million in fraud
proceeds, and defendants Gililland, Burreson, and others, ultimately caused losses to lenders of
over $4 million.

The new indictment separately alleges that Chiavola, Resendez, Fortune, and Haynie,
after leaving the employment of Gililland and Burreson, replicated the scheme on their own.
Gililland, Burreson, and Chiavola are further charged with money laundering for bank
transactions involving the proceeds of the fraud. Finally, Remy Heng is charged with bulk cash
smuggling for attempting to ship $20,000 in cash in a Pringles potato chip can via Federal
Express to Gililland in Spain while Gililland was a fugitive.

United States vs. Hoda Samuel, et al.

Cr. S 10-0223 JAM

On June 10, 2010, a federal grand jury returned an indictment charging 10 individuals
with 48 counts, including charges of conspiracy to commit mortgage fraud, mail fraud, and
making false statements in mortgage applications. The indictment focuses on two Elk Grove
businesses owned by defendant Hoda Samuel - Liberty Real Estate and Investment Company
and Liberty Mortgage Company. From April of 2006 through February of 2007, Samuel and
other Liberty employees are alleged to have been involved in at least thirty separate residential
real estate transactions involving fraud. Specifically, the indictment alleges that loan
applications contained misrepresentations concerning loan applicants’ employment and income.
In addition, the indictment alleges that many of the transactions involved the payment of cash-
back to buyers, often disguised as payments to contractors for repair and remodelling work, and
usually not revealed to the lenders. As a result of these undisclosed payments, lenders were led
to believe that the houses being purchased were worth more than the buyers were actually paying
for them. Of the thirty transactions described in the indictment, at least twenty-eight have now
gone into foreclosure, causing a collective loss to the lenders of more than $5.5 million.

United States vs. William T. Bridge

Cr. S 08-275 WBS

William Bridge wilfully failed to report over $3.8 million dollars on his 2003 – 2006
federal tax returns that he had earned as a licensed real estate mortgage broker doing business as
The Loan Center in San Francisco. In completing his tax returns, Bridge reported only the
compensation he earned as part of the “yield spread premium” that was reported by the lending
institutions themselves to the IRS. He did not report his full commission, which involved
substantially more money. During the same time, Bridge was paying thousands of dollars in
kickbacks to an employee of Long Beach Mortgage (formerly a subsidiary of Washington
Mutual bank) to process what he knew were fraudulent loans application packages to be secured
by residential properties located in the Sacramento and Stockton areas. Bridge pleaded guilty to
multiple counts of filing false tax returns and paying kickbacks in connection with real estate
loan transactions in 2008. On April 9, 2010, Bridge was sentenced to 21 months in prison, to be
followed by one year of supervised release, $1,057,700.90 in restitution to the Internal Revenue
Service, and a $60,000 fine. A co-conspirator, former Long Beach Mortgage employee Joel
Blanford, is currently on trial in federal court in Sacramento.

United States vs. Eric Ray Hernandez, et al.

Cr. S 10-249 AWI

Eric Ray Hernandez, Monica Marie Hernandez, and Evelyn Brigget Sanchez, all of
Bakersfield, were charged with submitting loan applications to lenders containing false and
fraudulent information that caused lenders to fund mortgage loans based on such fraudulent
applications. The indictment alleges that the defendants caused false statements to be submitted
to lenders concerning buyers’ income, assets, and liabilities, buyers’ employment status, and
buyers’ intent to occupy the properties as their personal residences. Additionally, the defendants
are alleged to have submitted false supporting documentation in support of mortgage loan
applications, including false pay stubs, false letters purporting to be from the buyers’ tax
accountant, false customer letters purporting to support the buyers’ self-employment status, and
false verifications of the buyers’ bank funds on deposit. The indictment alleges that the
defendants defrauded lenders of in excess of $2.5 million through this scheme.
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