The Cupertino CC reacts to the dissolution act.

As a result, the City of Cupertino RDA will be dissolved on February 1, 2012 pursuant to the Dissolution Act (unless the legislature adopts, and the governor approves, legislation to extend that deadline).

At the time of dissolution, the RDA’s non-housing funds and assets will then be turned over to a successor (the “Successor Agency”) charged with the responsibility of paying off the former RDA’s existing debts, disposing of RDA properties and assets to pay off the debt and return revenues to the local government entities that receive property taxes (the “Taxing Entities”) and wrapping up the business of the former RDA.

The RDA’s affordable housing assets, other than its existing housing fund balance, will be turned over to a successor housing agency (the “Successor Housing Agency”) to continue performing affordable housing activities. The former RDA’s affordable housing fund balance will be used to repay existing housing fund debts and/or remitted to the County Auditor/Controller for distribution to the Taxing Entities.

The California Supremes has ruled against redevelopment agencies which are trying to stay alive after being eliminated by the governor. The opt-in program has also been denied. Cupertino was hoping to use that to continue its development of the Vallco area.

A silver lining is that local schools might receive more of the property taxes which would have been diverted to these agencies and that local land grabs for big developers at the expense of small property owners will slow.

The decision elicited vows from the California Redevelopment Association and the League of California Cities to work with state legislators to revive the agencies they said protect job creation and local economies.

The Cupertino Redevelopment Agency proposes to eliminate blighting conditions and facilitate and assist the expansion, renovation, and revitalization of the Vallco Fashion Park shopping center through adoption and implementation of the Cupertino Vallco Redevelopment Plan.

Examining the decision deeper reveals the irony that prop 22 which was meant to protect redevelopment from state grabs ultimately resulted in their very demise.

Under AB26 and AB27, the state’s 390 redevelopment agencies would cease to exist unless they agreed to pay $1.7 billion this year and $400 million in future years toward schools and other public programs such as special fire districts. Redevelopment programs currently receive about $5.7 billion a year.

On Thursday, the high court unanimously ruled that AB26, which eliminated the agencies, was legal because redevelopment agencies “were created by statute and can therefore be dissolved by statute.”

But the court said AB27, which would have forced agencies to pay schools and other public programs in order to stay in business, was not allowable. … The majority said that requirement violated Proposition 22, a measure approved by voters to protect local funding from state raids.

Here’s a tale of how corrupted lawyers, construction workers and an ex-cop seized control of HOA’s by tampering ballots, paid themselves from HOA legal proceeds and hiring their own associates for HOA maintanence and fined homeowners “on trumped-up charges of violating association rules.”.
The shocking fact is that none of the main principals here were charged with any crime.

How many money making schemes like these are being perpetrated at HOA’s across the board ?

When a new development was nearing completion, the group would buy a couple of units in the community and then transfer partial ownership of the condos to individuals secretly on its payroll, according to court documents. While pretending to be residents of the communities, these “straw buyers” would run for leadership positions on boards of the new homeowner associations. By paying off community managers, hiring private investigators to find dirt on legitimate candidates, and rigging elections, the documents allege, the straw buyers were able to infiltrate boards at several new developments in Las Vegas from 2003 to 2008. Once in control of the boards, the straw buyers would then use their governing positions to steer millions of dollars in construction and legal fees back to their co-conspirators.
…
Murray first sensed trouble the following October, when the Vistana held its annual board election. The results were surprising. Two newcomers, an ex-cop and a union foreman, won spots on the board. It was odd, if only because nobody recalled seeing much of either man around the neighborhood. Shortly after, the two appointed another stranger to a vacant position.

…
In the fall of 2007 the Vistana board announced it had reached a $19.1 million settlement with Rhodes Homes. Of that—according to a recent accounting by current Vistana board members—about $11 million in legal fees and reimbursement expenses went to two firms: Spilotro & Kulla and Quon Bruce Christensen. That left $8.1 million for repair
…
Over a roughly six-month period, from the fall of 2007 through the spring of 2008, various teams of subcontractors working for Silver Lining Construction came and went from the Vistana—painting buildings, replacing windows, and patching roofs. By May 2008, all but $450,000 of the $8.1 million was gone.

Congress reinstated the higher FHA loan limits.

However Freddie and Fannie loans are still at the original limits.

From redfin’s excellent charts, home sales in Cupertino are down up to 25 percent from 2010 as median prices are down about 5.  Summer 90 day sales average peaked at 160 homes compared to 205 in 2010 and latest November values are trending about a quarter lower than last year as well at 110 versus 150. Even with the improving local tech economy, this slowdown points to a new trend where folks are staying longer at their current homes and not trading up as often. The end of the increased jumbo limits can’t be helping either. The condo market is even worse at sales down more than 50 percent from last yer. Bottomline, the real estate business can be better. Recent home ads have seen doubling and even tripling up of realtor teams. Will the increased competition ever lead to lower commissions ?

It is not surprising that the some of the same people who brought us the liar’s loans and other fraudulent activities during the bubble are at it again.

One of the most common forms of short-sale fraud happens when a seller or someone representing a seller doesn’t submit the best offer to the lender. A middleman purchases the short-sale property at the lower price, then turns around and resells the property to a legitimate buyer at a higher price — often on the same day, according to a recent Federal Bureau of Investigation report on mortgage fraud.

The middleman pockets the difference, sometimes sharing it with an accomplice.

“It does require a pretty sound knowledge of how a conventional loan is closed and how a short sale is negotiated and approved,” said Robert Hagberg, lead fraud investigator at Freddie Mac. Some fraudsters are real-estate agents marketing themselves as “short-sale specialists.” Title companies and settlement agents may be in on the scam too, he said.

Sometimes fraudsters try to manipulate the price lower by encouraging the owner to make the house look worse than it is, referred to in the industry as “reverse staging.”

That means you “don’t weed the yard, don’t shovel the sidewalks, don’t do any continued maintenance of the property, don’t worry about putting a fresh coat of paint on it, or even keep it neat and clean,” said Becky Walzak, president of Looking Glass Group, which provides consulting services to the financial-services industry. That reduces the value of the property when the appraiser or broker comes to evaluate it.

After this month’s reduction in conforming loan limits due to the expiry of the temporary increase from the stimulus package, the Senate has passed a bill restoring the higher limits.

But today, the Senate passed an amendment to a minibus spending bill that would extend the old, higher mortgage limits. It passed 60 to 38. Just eight Republicans voted in favor, while no Democrats voted against it.

Cupertino and Jobs are forever linked.

His love for the city and his deep roots in the community are perhaps not as well known as his design genious.

To his very last days, I believe he has Cupertino in his heart and mind.

RIP, Steve Jobs 1955-2011.

Will this be the beginning of the end of the mortgage crisis

At face value, the lawsuit makes sense; the role of the FHFA is to limit losses to Fannie and Freddie. The two have taken about $33 billion in losses from mortgage backed securities they bought from the big banks. They claim the big banks misrepresented the loans in the securities, that said loans were poorly underwritten, using inflated or falsified borrower incomes.

It’s a puzzle as to why the number of homes sold in the 95014 zip exceeds those listed for sale (at the end of the week) over an extended period in the redfin chart below. Could double counting be a culprit where MLS and property records are both included or are MLS listings being held from redfin ? It’s unclear when the “for sale” data is updated since the chart shows weekly numbers and the explanation implies a monthly collection of data.