Chance Gates' Blog

Roy Oswalt has been pitching really well however the Huston Astros have only scored 5 runs in his last 4 losses.  The Astros are only averaging 2.7 runs per game against right handed pitching.  The San Diego Padres have won 10 of the last 15 and 5 of the last 6.  I realize that the Padres are getting a great line, bu that seems to easy.   This reminds me of when Radke pitched for the Twins.    So take the Under.

These picks are meant to be for entertainment only!

As a Reno/Sparks real estate professional, I encourage all questions and comments on the Reno/Sparks real estate market or any of the articles posted on this blog.  I can be reached be email at chance@ballard-company.com or at http://www.myspace.com/chancegates

The addition of a new Super Walmart in North Valleys, along with another long-planned retail center, will boost retail offerings to the tens of thousands of residents north of Reno who have had to drive farther into town to shop.

Walmart will begin construction in the first quarter of 2011 on a 150,000-square-foot store, its sixth Super Walmart in the Truckee Meadows, says Delia Garcia, senior manager of public affairs and government relations.

The new store on Sky Vista Way will serve residents of North Valleys, Lemmon, Golden and Sun valleys, Stead, Red Rock, Cold Springs, and the California towns of Portola, Quincy, Graeagle, Herlong and Doyle.

The store also redraws service areas for Walmart shoppers in those communities, many of whom shop at the company’s Northtowne Lane store for general merchandise, or its Seventh Street Supercenter in west Reno.

“In this part of Nevada, folks are underserved for groceries and general merchandise, and this gives Walmart an opportunity to serve customers closer to home and reach more customers,” Garcia says.

The North Valley’s Walmart, which has yet to go to bid, should be open by the end of 2011, Garcia adds. Walmart expects to employ about 300 full- and part-time workers at the store, and hiring will start about three months before the store opens.

Jobseekers can apply online at job-center kiosks at existing Walmart locations. In addition to the 16.5-acre site being readied for Walmart, an investment group is preparing three acres of addition retail space in the area, says Kelly Bland, senior vice president of the retail properties group with NAI Alliance.

Depending on interest, the space could be developed into individual pads or line-shop space, Bland says. The high-volume traffic generated by Walmart makes a perfect fit for mid-size anchor tenants such as Kohl’s, Ross, or Office Depot, he adds.

“The dynamic is changing. Walmart is a wider draw than the immediate neighborhoods, and any type of tenant that will be there will be very well received,” Bland says. “Walmart will be able to draw more people into that center than the other three (centers in the area) are attracting right now.”

Despite high vacancy rates throughout submarkets in Reno and Sparks, Bland says retailers and residents have been clamoring for additional shopping choices in the North Valleys for a long time.

“Walmart has been looking at North Valleys for several years, and we finally were able to work out a deal with them that made sense for everybody. They have been wanting to open up out there for a while now.”

After more than two years of delay, construction of the 33,000-square-foot Three Flags Center between Lemmon and Golden valleys also is expected to break ground next week, says Brendan Egan, co-owner of 6 Development with partner Jack Dolan.

The development company already has leases signed with Dollar Tree, Big-O Tires and an independently branded sports bar, and 6 Development is in final negotiations with a national fast-food franchise. The Three Flags Center will open to 100 percent occupancy — a rarity for any retail center in northern Nevada.

“On a brand-new project that is pretty good,” Egan says. “That speaks to the quality of the North Valleys. The tenants we are dealing with have wanted to be in that area for two years now and think it is a great location. It has been an underserved market for a long time.”

Ken Mattison, vice president with the retail division of Grubb & Ellis NCG, says the North Valleys will experience the region’s next big explosion of new housing similar to that in Spanish Springs/Sparks in the early part of the decade.

There are 12,000 houses mapped for construction in the greater North Valley’s area, Mattison says. The current population is about 40,000. “It’s only been two years since you could get your oil changed there,” Mattison says.

“There is no major clothery, no family restaurant. There are huge needs up there. Vacancy is very slim in North Valleys, and the reason is that demand is good.”

Dennis Banks Construction is readying two other sites in the area, one at the corners of Silver Lake Boulevard and Red Rock Road, the other at North Hills Boulevard and Golden Valley Road.

Each site will be prepped for approximately 10,000 to 14,000 square feet of retail development. Grubb and Ellis will handle leasing at the sites.

http://www.nnbw.com/ArticleRead.aspx?storyID=15106

As a Reno/Sparks real estate professional, I encourage all questions or comments on the Reno/Sparks real estate market or any of the articles posted on this blog.  I can be reached by email at:  chance@ballard-company.com or http://www.myspace.com/chancegates

RISMEDIA, March 31, 2010—(MCT)—Wynn Bloch has always dutifully paid her bills and socked away money for retirement. But in December she defaulted on the mortgage on her Palm Desert, Calif., home, even though she could afford the payments.

Bloch paid $385,000 for the two-bedroom home in 2006 when prices were still surging. Comparable homes are now selling in the low $200,000s. Bloch, a retired psychologist doubted she’d see her investment rebound in her lifetime. Plus, she said, she was duped into an expensive loan.

The way she sees it, big banks that helped fuel the mess all got bailouts while homeowners like her are left holding the bag. No more. “There was not a chance that house was ever going to be worth anywhere near what my mortgage was,” said Bloch, who is now renting a few miles away after defaulting on the $310,000 loan. “I haven’t cheated or stolen.”

Time was when Americans would do almost anything to hang on to their homes. But that commitment appears to be fraying as more people fall behind on their loans, while watching the banks and lenders that helped trigger the financial crisis return to prosperity.

Nearly one-quarter of U.S. mortgages, or about 11 million home loans, are underwater, with buyers’ houses worth less than their loans. While home values are regaining ground, they remain far below their 2007 peak. Many homeowners are just now coming to grips with the idea that prices will take years to reach the pre-crash peak: as long as 14 years in California, according to economist Chris Thornberg.

Stuck with properties whose negative equity won’t recover for years—feeling betrayed by financial institutions that bankrolled the frenzy—some homeowners are concluding it’s smarter to walk away than to stick it out.

“There is a growing sense of anger, a growing recognition that there is a double standard if it’s OK for financial institutions to look after themselves, but not OK for homeowners,” said Brent T. White, a law professor at the University of Arizona who wrote a paper on the subject.

Just how many are walking away isn’t clear. But some researchers are convinced that the numbers are growing. So-called “strategic defaults” accounted for about 35% of defaults by U.S. homeowners in December 2009, up from 23% in March of 2009, according to Luigi Zingales, a professor at the University of Chicago’s Booth School of Business. He and colleagues at Northwestern University’s Kellogg School of Management reached that conclusion by surveying homeowners about their attitudes and experience with loan defaults. They found that borrowers were more willing to walk away if someone they knew had done it, and that the greater a homeowner’s negative equity the more likely they were to default, even if they had could make the monthly payment.

Similarly, an analysis released last year by credit bureau Experian and consulting firm Oliver Wyman estimated that walkaways accounted for nearly one in five homeowners who were seriously delinquent on their mortgages in the last three months of 2008.

“The fact that people are strategically defaulting—there is no question,” Zingales said. “The risk that the number of people doing this might explode is significant.”

A flood of walkaways could damage the nation’s fledgling housing recovery by swamping the market with foreclosed properties. Still, some experts are dubious that millions of underwater homeowners will pull the plug like Bloch did. Home ownership remains the cornerstone of the American dream. Moving is a hassle and the stigma associated with a foreclosure is likely to keep many hanging on for a recovery.

The biggest surprise is that so many underwater homeowners continue to pay, according to White, the Arizona law professor. He’s convinced that personal shame, as well as moral suasion by the government and financial institutions has kept many homeowners from walking away, even when they’d be better off financially to dump their homes.

But real estate veterans said old taboos are eroding fast. Jon Maddux, a former real estate investor who founded You Walk Away, a for-profit company that guides homeowners through the process of default in 2007, said his earliest customers struggled with emotional ties to their homes as well as remorse about reneging on an obligation. That’s changed as more homeowners have concluded that the housing market isn’t going to rebound quickly and they’d be better off cutting their losses. “Now, it’s more of a business decision—it’s people who could afford their house, but it’s an inconvenience,” Maddux said. He and other experts said average Americans are fed up with hearing how they’re supposed to honor their debts while businesses operate by another set of rules.

Consumers typically begin to think about walking away once the value of the property is 25% lower than the value of the debt, according to research conducted by Sam Khater, senior economist at real estate research firm First American CoreLogic. About five million people nationwide are in that situation, he said.

Some purchased their homes at the peak of the market only to see the value drop precipitously when the bubble burst. Others bought low, but couldn’t resist borrowing against their rising equity to make home improvements and to pay off other bills. When home values fell, they too found themselves underwater.

Ken Henrich purchased his Marysville, Calif., home for $187,000 in 2004. He and his wife later refinanced the property, tapping the equity to pay off credit cards. They now owe around $300,000 on a place that’s worth about $132,000. They let the four-bedroom residence slip into foreclosure and are currently waiting for it to be sold at auction. They’re planning on renting for a few years until they can possibly buy again. “We can more than make the payment,” Henrich said. “The way we look at it, our credit would still be perfect years from now, but we’d still owe tons more than it’s worth.”

There are consequences to walking away. A default will knock down a credit score by at least 100 points, said Craig Watts, a spokesman for FICO, the company that developed credit scores. That could make it tough to borrow money, rent an apartment or get a job since many employers now routinely check credit histories of potential hires.

To some, it’s a small price to pay to gain a measure of revenge against the financial institutions whose loose money helped to fuel the crisis. Joseph Shull, a marketing professor, said he’s planning on walking away from the town house he bought in Moorpark, Calif., in June 2006. “I’m angry, and there are a lot of people like me who are angry,” he said. He purchased the home for $410,000 and spent $30,000 renovating. Now the house is worth around $225,000. Shull admits he overpaid for his property, but he said it fell in value in part because of “regulatory mismanagement.”

(c) 2010, Los Angeles Times.

Before walking away there are other things a homeowner can try please checkout the following:

http://www.makinghomeaffordable.com/requestmod.shtml

http://chancegates.com/2010/03/18/short-sale-the-rise-the-revenue-the-reality/

http://chancegates.com/2010/03/14/home-owners-to-be-paid-to-short-sale/

http://chancegates.com/2010/02/26/2009-foreclosure-legislation/

http://chancegates.com/2009/06/12/homeowners%E2%80%99-right-to-mediation-requirement-before-foreclosure/

Please get all your legal advice from an Attorney.

As a Reno – Sparks real estate consultant I encourage questions and comments regarding the Reno – Sparks real estate market or any of the articles I post here.  I can be reached at chance@ballard-company.com

RISMEDIA, March 13, 2010—(MCT)—Phil Kelly had 18 more months to go before the fixed rate on his $2.5 million mortgage became adjustable. But when Kelly, a former computer executive living in Rancho Santa Fe, California learned he could knock his interest rate down by a full percentage point by refinancing, he went for it.

“It’s always tough to pick the exact bottom or top of anything,” Kelly said. “But I think this rate is about as low as you’re going to get.”

Rates on jumbo mortgages — loans of more than $729,750 in counties with the highest-cost housing — shot up during the financial crisis as lenders and loan investors shunned anything tainted with even a whiff of higher risk. Rates on big mortgages were especially high relative to those on smaller loans.

But in a boon for borrowers in California’s expensive housing markets, the jumbo-loan market is starting to return to normal.

Two weeks ago, the average interest rate on 30-year fixed-rate jumbos dropped to 5.79%, a nearly five-year low, according to rate tracker Informa Research Services of Calabasas. It edged up to 5.88% on Tuesday, still very attractive by historical standards. The average is down from well above 7 percent in late 2008.

Rates are even lower on so-called hybrid adjustable mortgages, on which the rate is fixed for, say, five years and then adjusts annually. Kelly’s new loan is a five-year hybrid adjustable identical to his old one, except that he’s paying about 5%, down from 6%.

Banks are also relaxing slightly some of their requirements for jumbo loans. That’s an encouraging sign because the market for jumbos, in contrast with the rest of the mortgage business, isn’t being propped up by Uncle Sam.

The lower rates and somewhat easier terms reflect newfound confidence among banks in the housing market. That’s because, by definition, jumbos are too big to be bought by Freddie Mac and Fannie Mae or to be insured by the Federal Housing Administration. Plus, the private market for mortgage-backed bonds dried up when the meltdown hit. So lenders making jumbo loans these days must be willing to take the risk of keeping them in their portfolios.

The maximum amounts for Freddie Mac and Fannie Mae “conforming” mortgages, and for FHA mortgages, are set by Congress. The cutoff for single-family homes was $417,000 from 2006 until February 2008, when lawmakers increased it temporarily to $729,750 in certain high-cost areas, including Los Angeles, Orange and Ventura counties in California. Conforming loans top out at $500,000 in Riverside and San Bernardino counties and $697,500 in San Diego County.

The increased upper limits, which have been extended until the end of this year, have created a three-tier system in expensive areas, mortgage professionals say: loans of up to $417,000, which are the easiest to obtain and carry the lowest rates; “conforming jumbos” from $417,000 to $729,750, which are somewhat harder to get and have slightly higher rates; and true jumbos, with the toughest standards and highest rates.

In the boom years of 2005 and 2006, interest rates were typically no more than a quarter of a percentage point higher on jumbo loans than on conforming loans, according to Informa Research. That widened as the mortgage meltdown intensified and home prices dropped in late 2007. The spread ballooned to nearly 1.7 percentage points in early 2009 after the entire credit system froze.

But this year the rate spread has narrowed to less than a percentage point. It could shrink more if conforming-loan rates rise as expected after the Federal Reserve wraps up a $1 trillion-plus program to support the market for conforming loans next month.

In addition to lower rates, down-payment requirements are being relaxed in some cases. For example, to write a jumbo loan in coastal areas of Los Angeles and Orange counties, Wells Fargo Home Mortgage looks for a 20% down payment or that percentage of equity, down from 25% last year, said Brad Blackwell, a national mortgage sales manager at the lender.

The reason: Wells believes high-end home prices are stabilizing in those coastal counties. But the bank still requires higher down payments in the Inland Empire and other battered housing markets such as Florida, Nevada and Arizona, where prices for jumbo-size homes don’t appear to be stabilizing, he said.

Jumbo loans remain much harder to get than before the credit crunch and recession. Borrowers typically must have a credit score of at least 700, compared with boom-era minimums in the 600s, though Laguna Niguel mortgage broker Jeff Lazerson said at least one lender was again making sub-700 jumbos available.

What’s more, unless their down payments are very large, borrowers must provide evidence of high income, have sizable bank accounts as a cushion against the unforeseen and occupy the houses themselves.

But there are clear signs that the jumbo market has loosened. One is an increasing availability of “stated income” loans — those that don’t require proof of income — of as much as $2 million to borrowers with at least a 40 percent down payment, said mortgage broker Gary Bluman, owner of Real Estate Resources in Brentwood.

Also, instead of a true jumbo loan, some “piggyback” second loans are available again to help certain borrowers with 25% down payments pay for high-priced homes, Lazerson said.

Of course, adjustable, stated-income and piggyback loans were big contributors to the mortgage meltdown. But such provisions are less risky if a borrower has 25% to 40% equity.

Despite the confidence in the market that such terms imply, lenders and mortgage investors are still dealing with piles of bad jumbos made during the boom.

Delinquencies of 60 days or more on prime jumbo loans that were packaged into securities jumped to 9.6% in January, up from 3.7% a year earlier, Fitch Ratings reported this month.

The jumbo delinquency rate in California climbed to 11.3% from 4.1% a year earlier.

For now, the jumbo market remains limited to the volume of loans that banks are willing and able to keep on their books. But there is hope for a return to private outside funding.

Although no jumbos have been turned into securities for at least two years, packages of delinquent jumbos have begun to be sold again to “vulture” investors, a sign that the secondary market for the loans may revive, said Michael Fratantoni, vice president of research at the Mortgage Bankers Association.

“The ice sheet,” he said, “is starting to crack here and there.”

As a Reno/Sparks real estate consultant I always welcome any comments or questions on the Reno/Sparks real estate or any of the articles I posted.  You can email me directly at chance@ballard-company.com

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• “FHA’s HARP Program Extended (And Pretended) By One More Year To June 30, 2011″ and related posts (zerohedge.com)

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As a Reno – Sparks real estate consultant I encourage any questions or  comments on the Reno – Sparks real estate market or about any of the articles I post.  You can email me at chance@ballard-company.com