Should banks get tax breaks on foreclosures?

Foreclosure Fairness Ordinance: San Francisco Lawmakers Take Aim At Tax Break

Aaron Sankin, Huffington Post, May 5, 2012, link

San Francisco Foreclosure Moratorium

SAN FRANCISCO — City officials introduced a bill Tuesday aimed at closing a loophole that gives banks a tax break when foreclosing on a home.

The Foreclosure Fairness Ordinance, co-sponsored by virtually every progressives on the Board of Supervisors, would eliminate a provision in the tax code exempting lenders foreclosing on a home from paying the real estate transfer tax normally required when a property changes hands.

“There’s something rotten in Denmark, rather San Francisco, when it comes to the high rate of foreclosures in the city,” Supervisor John Avalos said at a press conference announcing the legislation. Avalos, who introduced the bill at the request of San Francisco Assessor-Recorder Phil Ting, insisted the measure is less about raising revenue than about keeping people in their homes.

During years with low foreclosure rates (like 2005), the bill would only generate a few hundred thousand dollars. But in years that see a high volume of foreclosures (like 2011), San Francisco could raise an additional $8 million.

Avalos told the story about a medical emergency that pushed him to the brink of losing his home to foreclosure. With the help of an outside group, he was able to secure a loan modification and keep the property. “It definitely helped that I was an elected official,” he said, “but I want everyone to have the same opportunity I had.”

The measure’s backers hope eliminating the exemption would give banks a financial incentive to pursue loan modifications instead of foreclosures.

“I’ve been working on this issue for seven years,” said Ting, who became a national figure after releasing a report revealing that 84 percent of foreclosures in San Francisco were, in some way, executed illegally. “Everybody loses when you have a foreclosure–the homeowner, the bank and the city.”

“This is not a symbolic gesture,” added Supervisor Malia Cohen, whose historically African American district of the Bayview has been especially hard-hit. “This is a way for the city to step up where banks have failed us.”

This bill isn’t the first time the Board of Supervisors has gone on record opposing the wave of foreclosures that hit the city following the collapse of the housing bubble.

In April, officials unanimously passed a non-binding resolution calling for a moratorium on foreclosures until additional homeowner protections are enacted.

Many on the Board are hoping those protections, which range from prohibiting the much-loathed practice of dual-tracking to making it easier to prosecute against financial crimes, come in the form of the California’s passing the Homeowners Bill of Rights proposed by state Attorney General Kamala Harris.

The legislature has already passed two of Harris’s six bills and is currently waiting to hear the other four.

Since California law requires voters to approve all local tax measures, once this initiative passes the Board of Supervisors, it will then appear on the November ballot.

In Our Backyard: Another Reason to Join Us at the KW Shred-A-Thon on March 3!

Identity theft
Thieves are using new technologies to steal from consumers

Glenn Wohltmann, Pleasanton Weekly, March 2, 2012, link

Any given week, Pleasanton police respond to between five and 15 reports of identity theft. On Feb. 27, for example, two people were arrested at Motel 6 with items linked to identity theft — document-making equipment, credit cards not in their names, fictitious drivers licenses, fictitious registration tags, computer equipment and computer disks.

During the week of Feb. 14-21 alone, there were five reports of theft or attempted theft of information or fraudulent charges on an account.

Pleasanton police public safety Officer Archie Chu said identity theft — using someone else’s name and account information to buy items for themselves — has been on the rise in the last few years.

“There are more people who shop online, that’s part of it. People go onto a website that isn’t really well known and they don’t know what kind of security that’s on the site. That’s one way they can get your identification,” Chu said.

One reason for the spike, according to Pleasanton Detective Michael Rossillon, is that the California Penal Code was expanded by Gov. Schwarzenegger to include a wider range of crimes.

“We’re quite inundated with the 530.5 section, which covers all identity theft,” Rossillon said. “It’s pretty lucrative and it’s hard to catch these criminals.”

He said another reason the crime is so popular is the low penalty involved: California’s code allows for a sentence of up to a year in a county jail and fines.

But a large part of the ongoing increase is that thieves are becoming more and more devious in obtaining information and making charges. Javelin Strategy and Research, a Pleasanton-based company that provides information for banks and others, just released a report that outlines some of the new ways thieves are getting stolen information.

Phil Blank, Javelin’s managing director of security risk and fraud, who also serves on the Pleasanton Planning Commission, said new technology is giving fraudsters more ways of getting and using personal information.

“What we’re seeing is a redirection of identity theft and identity fraud,” Blank said. “Fraudsters go where the money is, and with the proliferation of mobile devices we’re seeing increased risk of fraud.”

He said people with smart phones are more likely to be victims, because users are lax about security on their phones.

“In fact, smart phone users experience a fraud rate of 6.6% compared to 4.9% for all consumers; 4.9% of all consumers were victims of identity theft — that’s one in 20. The fraudsters are seeing smart phone users as a new, fertile landscape,” Blank said.

“Many smart phone owners don’t have password protection on their screen. Many smart phone owners don’t have what we call ‘remote wipe’ software installed on their phone. What this does — if I were to lose my phone, I could log on online and erase everything on my phone, even though I don’t have it in my possession.”

In addition, he said, many people keep personal information that makes it easy for thieves.

“It depends on the phone,” Blank said. “Some people do banking on their phone. Some phones cache information.”

That means some phones keep data in their memory to make it easier to access information in the future.

“Lots of times, in that cached information is secure information,” Blank said. Even innocuous information like the name and phone number or email address of a person’s mother can help out a potential thief.

Javelin’s report shows smart phone owners have higher incidents of fraud and more money is stolen than average. It notes that “smart phone owners who suffered from fraud had a mean fraud amount of $1,547 and a mean consumer cost of $329, compared to $1,513 and $354 respectively of all fraud victims.”

Beyond that, the report says smart phone owners who are fraud victims are 25% less likely to know how their information was stolen. The report indicates that may be due to owners’ “affinity for technology.”

Smart phone users who click on new applications may open themselves up to thieves. Those who install apps on their phones have a fraud rate of 6.8%, and people who frequently install new apps are 14.9% more likely to be fraud victims, the report said.

Blank described a scam in China, where smart phone users installed what was supposed to be a security application. Instead, he said, it installed a program that would wake up at 2 a.m. when most people are asleep and dial premium SMS numbers — similar to a 900 number — multiple times.

“It would hang up your phone and then it would erase the log of those phone numbers,” he said. “You didn’t realize it until you got your bill.”

People who use Facebook or LinkedIn are also at higher risk. Blank explained that a clever fraudster can use those sites to learn date of birth, where someone went to high school, and through checking out a person’s friends, can learn the name of an uncle — leading to the maiden name of his or her mother. That’s all information a bank would want if a thief wants to transfer money.

Blank said an “astonishing” number of people accept Facebook invites from people they don’t know, opening themselves up to fraud.

Hackers have been downloading bulk files from sites that, over the last year, included CitiBank and Lucky, to name just two. People whose information is stolen usually get what Blank called a breach letter. Those letters generally tell a consumer that they have nothing to worry about.

Not so, Blank said.

As of 2011, he said, “you are nine-and-a-half times more likely to be a fraud victim than anyone who has never received a letter.”

That’s up from six times more likely in 2010; four times more likely in 2009; and three times more likely in 2008.

“These are very, very, very important items in the industry,” Blank said. “Consumers believe these letters. They think everything is going to be fine.”

Account takeovers — in which a thief will get personal information and change a password blocking the owner from accessing her or his account — have seen a 12.6% increase since 2010.

Although most fraudsters prefer to go online or use a phone, some still brave surveillance videos and store security to make their illegal purchases in person. Pleasanton saw at least three such arrests in 2011. In one, Jennifer Rose Marie Shewmake, 23, tried to use a forged credit card at Fred Meyer Jewelers in the Stoneridge Shopping Center around 2:13 p.m. July 20. She was charged with two counts of forgery, theft and identity theft.

A woman was caught in the Walmart parking lot on May 23 with 67 forged Visa debit cards, along with paraphernalia needed to create more, and a false driver’s license. Leona Charmaine Savoy, 36, was booked on charges of forgery in connection with the false driver’s license, identity theft, counterfeiting of debit cards and modifying the magnetic strips on the cards.

The biggest local case took place last March 9 when an employee at the Apple store at Stoneridge Shopping Center got suspicious and called police on three men. Three Mexican nationals — Oscar Romero, 34, Jose Avalos Romero, 35, and Victor Carillo Vasquez, 36 — were charged with forgery, possession of stolen property and burglary. Police said the men were buying products with forged credit cards, then shipping them to Mexico to be resold.

That investigation led Pleasanton police to a hotel room in Alameda, where detectives turned up about 75 counterfeit credit cards and a “vast amount” of merchandise purchased in Pleasanton, Hayward, Emeryville, San Francisco, Daly City and Sacramento.

There is some good news. Although the number of identity thefts is up by about 11%, according to the report, the amount stolen has trended steadily downward to $1,513 in 2011, from just over $3,000 in 2014. Police are catching fraudsters more quickly, too, resolving cases in about 12 hours in 2011 as opposed to 18 hours in 2004.

See the suggestions on how to protect yourself on identity theft so you don’t because another statistic with the Pleasanton Police Department.

In Our Backyard: School Board See Cuts

Pleasanton school board braces for more cuts at meeting tonight, including adult ed cuts
Facing possible $5.4 million in funding losses, district likely to cancel Barton, other programs

Glenn Wohltmann, Pleasanton Weekly, February 28, 2012, link

The Pleasanton school board plans to spend an hour tonight reviewing a list of potential cuts that include eliminating the Barton Reading Program, cutting reading support at elementary schools and reducing counseling services at all grade levels.

The list of cuts is identical to the one in use for the last few months, although two board members, Valerie Arkin and Jamie Hintzke, had asked staff to look into other cuts in the hope of saving the Barton program.

The cut list also includes eliminating adult education and summer school programs as well as eliminating the director of those programs, Glen Sparks, and ending support for home schooling. It would also cut program specialists and a psychologist.

The list also includes cutting back on custodians at middle and high schools and the district office, as well as cutting grounds services and maintenance services. All the cuts are reductions of fulltime employees (FTEs) and may not actually eliminate jobs, with the possible exception of Sparks.

Car allowances for management would be cut or reduced as well.

The total savings would be just over $2.2 million.

Those cuts are in addition to the cuts proposed for this year that were later restored through fundraising, concessions from the district’s two unions and dipping into district reserves.

Those cuts included, among others, eliminating an elementary school band and strings teacher, cuts to site technology specialists and library assistants at middle and elementary schools, cutting counseling services at middle and high schools, and eliminating class size reductions in grades kindergarten through three.

Restoring those cuts would total more than $3.1 million, and the two cuts lists total more than $5.3 million altogether.

Luz Cazares, assistant superintendent of business services, has been planning for two scenarios, describing them as bad and worse.

In one, if a tax increase plan set for November passes, some of the cuts could be eliminated halfway through the year, although it would still eliminate funding for transportation.

The other, if the tax hike fails, could mean cuts of $5.4 million to the district.

Cazares has said she must plan for the worst-case scenario and notes the state budget contains “risky assumptions.” Given that, the district is preparing layoff notices for some employees.

The board is also set to finalize its policy allowing drug detection dogs onto high school campuses. If approved, that could potentially send dogs to high schools the next day.

In Our Backyard: Local Realtors Look Out for Your Wallet

Realtors want limits placed on retrofit requirements
Proposed legislation would put brakes on programs state can impose on home buyers

Jeb Bing, Pleasanton Weekly Staff, February 24, 2012, link

In a continuing effort to reduce consumers’ costs associated with purchasing a home, the California Association of Realtors is sponsoring Assembly Bill 1711, which will clearly define what constitutes an energy efficiency retrofit that would “unreasonably or unnecessarily” affect a home purchase.

Recently enacted legislation requires the California Energy Commission (CEC) to pursue energy conservation in a way that does not “unreasonably or unnecessarily” affect the real estate sales process.

However, the NAR says, the lack of a clear definition of “unreasonably or unnecessarily” fails to provide sensible limits on the programs that can be imposed on home buyers by the CEC.

The CEC is currently evaluating implementation strategies focusing on programs requiring installation of energy saving improvements at the time a home is purchased. Such programs, for example, can require home purchasers to pay for improvements that will never pay for themselves over the lifetime of the improvement. Additionally, the CEC is considering requirements that could add thousands of dollars to the up-front cost of a home.

According to the CAR, Assembly Bill 1711 (Galgiani, D-Tracy) will prohibit the state from creating a program that requires home buyers to pay out of pocket for energy improvements at the time a home is purchased or that would prevent a home buyer from closing escrow on time. The measure also requires that the costs of mandated improvements be recoverable over the lifetime of the improvement.

Keeping it Local: Becoming One Never Sounded So Good!

The case for buying a home now

Mary Umberger, Chicago Tribune, February 5, 2012, link

SoldAccording to housing bear Christopher Thornberg, the “wild up-and-down” in real estate is over, and markets should begin a gradual turnaround soon. (Comstock Images)

A notorious housing market bear has changed his tune. Yes, he says, now is a good time to buy a home, if …

It’s a pretty important “if.” Still, people noticed when Christopher Thornberg — an economist who built a reputation for being a relatively lonely and boisterously outspoken housing doomsayer in the middle of the last decade, while Americans were buying homes as fast as they could — recently began to suggest that the overall market had settled and conditions are much improved for buying.

Thornberg, a founding principal of Beacon Economics, an independent research firm in Los Angeles, and former senior economist with the UCLA Anderson Forecast, talked about the differences between then and now:

Q: Is it safe to presume that you made no friends in the housing industry when you started publicly warning that the bubble was bursting?

A: Yes, I’m persona non grata. Local (housing-industry) groups will interact with me, but the national groups, no way. In 2004 and 2005, I was screaming that there was a real estate bubble, and everyplace I went, other economists would pooh-pooh me.

When the National Association of Realtors was spending lots of money in 2007 advertising to consumers that it was both a good time to buy and sell a house, I continually pointed out the stupidity of thinking — and promoting — the idea that housing is a great investment. It’s not. We as a nation need to come to the functional realization that housing is a consumption good — the lower the price of housing, the better off we are as a nation. Cheap housing is good.

Q: Why weren’t more economists vocal at that time that the market was getting overheated?

A: Ninety percent of all economists are guys who sit in academic offices writing on obscure issues that are unimportant, that three other people will read, so that they’ll get tenure. The majority of economists aren’t attached to the real world.

But most private-sector economists are attached to the financial industry, they work for housing agencies and the industry. They have a conflict of interest.

I’d like to say I was the smartest guy out there, but there were other economists shouting “Bubble!” — though they were in the minority. But the guys who look at the economy on an independent basis, for the most part, they got it.

Economists are taught that markets are efficient, and from that perspective, bubbles can’t happen. When you’re sitting there in the midst of the real estate market going up, up, up, it’s easy to say, if this is a bubble, it would have blown up already. A guy walked up to me in 2006, when prices were still climbing, and said, you ruined my life — because I listened to you, I didn’t invest in property, and look at all the money I could have made.

Q: Did you hear from him again, when housing prices kept falling for years after that?

A: No.

Q: Do you believe the market has bottomed, from a nationwide perspective?

A: Absolutely. That’s been going on for a while now. You can argue, is this (bottoming) just in certain markets? But when all is said and done, the wild up-and-down is done.

But housing markets don’t bounce, they splat. They hit bottom and they stay on the bottom. We have to get rid of excess supply of units and get rid of foreclosures, and home equity has to start building. That’s when the market starts to recover.

So, we’re still in the splat phase. This should be the year that things start to perk up a little. We’ve burned up excess supply, foreclosures are starting to decline, income is starting to rise, jobs are starting to rise. Housing should start to turn the corner this year — but there won’t be anything frenetic, and there will only be a slow increase in prices.

Q: Do you think conditions now are right for buying?

A: A couple of years ago, I was saying that we were still in the bubble, don’t buy. But now I’ve been saying, if you need a house — if you recognize that a house is a consumption good and not an investment opportunity, you should consider buying. With interest rates continuing to come down and with prices that have sagged, in some markets — particularly Florida, Arizona and Nevada — affordability is at record levels. But it has to be a long-term hold — you have to be in long term.

Q: Where do you see interest rates going?

A: Treasurys will start to goose up this year, as fears of Europe start to fade away, and that will start to push mortgage rates up, but I don’t see them going to 8 percent or anything.

Keeping it Local: BART Changes in the Area

BART unveils new geographical zone policing structure
New system breaks current zones down into smaller areas that police say will be easier to manage.

Pleasanton Weekly, February 15, 2012, link

BART police officials Tuesday unveiled a new zone geographical structure that they believe will spark proactive problem-solving to reduce crime and social disorder.

Speaking at a news conference at police headquarters at the Lake Merritt BART station, Police Chief Kenton Rainey said creating the new
structure is one of the recommendations that the National Organization of Black Law Enforcement Executives made following the fatal shooting of unarmed passenger Oscar Grant III at the hands of BART Officer Johannes Mehserle three years ago.

“We’re very excited about the direction we’re going in and believe it will result in more accountability for our officers,” Rainey said.

Grant was fatally shot on the platform of the Fruitvale Station in Oakland on Jan. 1, 2009, by Mehserle, who claimed that he had meant to use a
Taser on Grant instead of his service gun. Mehserle was later convicted of
involuntary manslaughter for the shooting.

Deputy Police Chief Benson Fairow said the new structure breaks the current zones down into smaller areas that are easier to manage.

Fairow said the department used to have four patrol zones but it will now have five zones.

He said each zone will have a lieutenant supervising a team of patrol sergeants, police officers and community service officers who will be responsible and accountable for providing service to their areas at all times.

Fairow said BART police will use an enhanced form of community policing they call Community Oriented Policing Problem Solving, or COPPS.

He said it is a policing philosophy and management approach that promotes community, government, police partnerships and proactive

The idea, Fairow said, is to create positive, productive relationships between the transit agency’s police officers and its riders in order to make riders feel safer and promote greater job satisfaction for officers.

Rainey said he thinks “passengers will feel safer” because more police officers will be in BART’s trains and stations.

Farrow said the new zones are: Zone I, which includes all Oakland Stations, Zone II, which includes all stations in Contra Costa County and
Berkeley, Zone III, which consists of all other stations in Alameda County, which includes the area from San Leandro to Dublin/Pleasanton, Zone IV, which consists of all San Francisco stations, and Zone V, which includes the stations in San Mateo County.

Keeping it Local: School District Struggling

School district could cut 30 jobs starting July 1 as state aid lags / Some positions could be restored if November tax measure passes

Glenn Wohltmann, Pleasanton Weekly, February 6, 2012, link

Looking at bad and worse figures from the state, Pleasanton school officials have released numbers that could mean cuts of nearly 30 full-time jobs for the next school year budget that takes effect July 1.

The more severe cuts would come if Gov. Jerry Brown’s plan for a tax increase on the November ballot fails. In that scenario, nearly $5.5 million would have to be cut from the 2012-13 school year budget, and school officials are gearing up now to make those cuts.

“Due to statutory timelines for layoffs, we are unable to wait until November and hope that the governor’s tax initiative passes,” Superintendent Parvin Ahmadi states in a Guest Opinion this week (page 8) in the Pleasanton Weekly. “We must base our budget on facts and not hope.”

A tentative plan from the district would eliminate funding for the Barton Reading Program, axe adult education and summer school, along with its director and classified staff, drop three full-time counselor positions from middle schools, another three at high schools and one-and-a-half at elementary schools, plus eight-and-a-half elementary fulltime reading specialist positions.

The full-time positions cited are not necessarily full-time jobs held by one person; in many cases, employees are part-time workers or split their schedules at different locations.

The plan would also cut one full-time psychologist position and one program specialist position and eliminate support for home schooling for kindergarten through eighth grade. Two full-time custodian positions at high schools and a one-and-a-half time middle school custodian position would be cut, along with a half-time custodian position at district offices. A full-time equivalent maintenance position would also be cut, as would car allowances for managers; management would see its work year cut by five days.

Should voters approve a tax increase, many of those worst-case cuts could be restored sometime after November. The director of adult education and summer school could be brought back, as could classified support for those programs. Elementary school counseling could be restored midyear, bringing it to the same as this year; even with the tax increase, middle school counseling would see one-and-a-half fulltime positions cut and high school counseling would be cut by one fulltime position.

If the tax increase is approved, elementary reading support specialists would be still cut by four-and-a-half fulltime positions and the teachers assigned to the Barton Reading Program would be cut by half to one half-time position. Psychologists and program specialist positions would remain the same, as would the one-and-a-half-time position for home schooling support. Custodial positions could be restored to their 2011-12 schedules.