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Loan losses put Granite Bay bank at risk of failure, seisure

admin — Thu, 01 Jul 2010 05:11:05 +0000

Problem loans for residential and land development have placed Granite Community Bank, a small lender in Granite Bay, at risk for failure and seizure by the government, according to regulatory filings and banking analysts.

The bank lost more than $5.5 million last year, including more than $3.5 million in the fourth quarter. According to Oakland-based Foresight Analytics, Granite Community holds $14.2 million in loans that are in default or close to default – about four times the bank’s reserve fund to cover such losses.

“They do face a takeover at some point in time unless they can improve their capital situation,” said Bert Ely, a banking industry analyst in Alexandria, Va., who reviewed the bank’s most recent government filing for The Bee. Ely said the bank reported an unusual burden of bank-owned real estate – a result of area foreclosures – and a perilous dependence on construction and commercial real estate loans.

“It’s quite possible that their losses … will wipe out their capital and render them insolvent,” said Ely.

Last March, just 30 U.S. banks or thrifts faced such severe problems, according to data from Foresight, a market research firm. All but one have since been seized by regulators. As of September, 56 banks or thrifts struggled with challenges as extreme as Granite Community’s current plight; since then, 41 of those have failed.

After a bank failure, depositors are safe, protected by insurance for up to $250,000 each, but shareholders lose their investments and local commerce could suffer.

“Our special marketplace, south Placer County, has been impacted dramatically” by the recent economic downturn, said David R. Kaiser, Granite’s chief executive. “We’ve been aggressive at recognizing problems. We haven’t tried to sugarcoat anything.

“We see a fairly bright future,” he added, noting that remaining challenges are “not a bottomless pit.” Kaiser said he hoped to increase lending to small businesses this year as the economy recovers.

The Granite Bay lender, founded in 2002, is among several small local banks that have been hammered by the region’s exceptionally severe real estate bust and ill-fated lending practices. Just five of the 15 commercial banks based in the Sacramento area made money last year.

Granite Community did not receive funds from the federal TARP bailout, unlike the second-biggest regional loser in 2009, Community Business Bank in West Sacramento. It lost nearly $4.2 million – more than its entire $4 million bailout.

Last year, The Bee examined Community Business Bank’s unusually high level of insider lending to its own directors and their family members. Since then, the West Sacramento lender has sharply reduced its loans to officers and directors.

Mark Day, Community Business Bank’s chief financial officer, said tax disadvantages due to his bank’s status as a relatively new institution worsened its 2009 losses. He did not respond to a question about whether the bank still intends to repay its bailout funds, as officials said last year it would.

Sacramento’s River City Bank lost $3.3 million in 2009, Five Star Bank in Rocklin lost nearly $2.3 million, and Community 1st Bank, a Roseville lender that also got TARP funds, lost $1.2 million.

Granite Community’s condition is by far the worst of any local bank, according to leading financial rating companies. It’s the second lowest-rated bank of its size in California and is in worse shape than more than 98 percent of peers nationally, according to Bankrate.com. Bauerfinancial.com gave Granite Community zero stars – the lowest possible rating.

In 2008, Granite Community entered a formal agreement with its chief regulator, the U.S. Comptroller of the Currency. The agency required the bank to increase capital reserves to cover bad loans. But the bank’s condition has since deteriorated, as demand for housing and commercial development collapsed.

Granite Community is trying to raise $6.5 million from investors to return its capital holdings to levels demanded by regulators. So far, the bank has taken in about $2.2 million, Kaiser said, which is being held in escrow until other funds are raised.

Raising enough capital “is definitely an uphill battle” for a small, struggling bank in today’s economic climate, Foresight’s Matthew Anderson said. Takeover by a larger, healthier bank might be another option, he said.

“Someone putting capital in has to ask,” Ely said, “is this bank insolvent, and if so, am I throwing good money after bad?”

Sacramento is Going Green

admin — Tue, 08 Dec 2009 02:56:21 +0000

Sacramento is Going Green

Are you planning to build a home in Sacramento? Then you will want to consider the new trend in Sac Town, which is, living in Green Homes. Does that mean you have to color your house green?? No. Then what are Green Homes? Green Homes are places for healthier living. They are constructed using fewer resources when compared to the traditional homes. Green homes create much less waste as they use less energy and water. The main factor is to reduce the energy utilization. The characteristics of a Green Home are many.
· The ordinary windows are replaced by windows that are energy efficient to cut down on the costs of heating and cooling.
· Incandescent lights are replaced by long lasting florescent compact lights. These lights use less energy and waste less in the form of heat radiation.
· Wind turbines and solar panels built out of materials available in a local store will make your house greener by decreasing the amount of energy utilized.
· Rain water is harvested to serve purposes of a car wash, gardening, etc. This is sure to reduce your water bill by a considerable amount.
· Energy consuming kitchen appliances are replaced by solar cookers and water heaters to completely utilize solar energy during the day.
Green Homes are an attraction as they are eco friendly and less expensive. The materials used are natural and reusable. Your house can be completely eco friendly with solar power, rain water harvesting and bamboo flooring. Green Homes are an effort to reduce environmental pollution. The waste generated during construction of green homes is very less. Most of the construction materials are reusable. There are no harmful chemicals released into the environment. These homes are designed with proper insulation and drainage facilities. The expenses involved in the construction of a Green Home depend on its size.
The earth now is prone to global warming. There are abrupt changes in the climatic conditions all over. In such a situation, Green Homes are an initiative from your end to save the planet. Green Homes are environment friendly as they do not have a negative effect on the environment. Green living also gives a feeling of responsibility towards the environment.
The building designs and methods ensure proper energy utilization and a greener environment for each home. GreatWest GMAC Real Estate Company is one of the best real estate companies operating in Sacramento, El Dorado and Placer. They will help you find a green home that is beautiful, eco-friendly and economical. Be a trend setter and save the environment from further damage. For more information on where and how to find the best Green Homes visit GreatWest GMAC Real Estate on http://www.greatwestgmac.com/index.cfm.
For additional resources and information please visit the following sites.

Resource Links:

http://www.gmacrealestate.com

Bill Fields All Star Coaching Program: http://www.AllStarCoaching.net
GreatWest GMAC Search all MLS Listings: http://www.LocalHomeLink.com
GreatWest GMAC Consumer Buyer/Seller Blog: http://www.GreatWestBlog.com
T. Sami Siddiqui (Broker/ Owner) Buzz About Sacramento Blog: http://www.samisiddiquiblog.com
Brodie Stephens (Executive Vice President) One Stop Blog: http://www.brodiestephensblog.com
GreatWest Podcasts- Weekly Updates on new REO, Short Sale, Bank Owned Foreclosure Listings: http://www.HouseTalkOnline.com
GreatWest Videos: http://www.youtube.com/brodiestephens
Facebook Brodie Stephens Profile Page: http://www.facebook.com/brodiestephens
Facebook GreatWest Profile Page: http://www.facebook.com/searchmlshomesforsale
MySpace Brodie Stephens Blog: http://www.myspace.com/brodiestephens
MySpace GreatWest Blog: http://www.myspace.com/greatwest
Picasa Web Album: http://picasaweb.google.com/brodiestephens
GreatWest Real Estate Careers- GMAC is looking for Professional Realtors to Join Us: http://www.CareersWithUs.com
Global Employee Relocation: http://www.employeerelocation.blogspot.com
Apply for a Loan: http://www.choice1funding.com
ActiveRain Blog Brodie http://activerain.com/blogs/brodiestephens
ActiveRain Blog Company http://activerain.com/blogs/greatwestgmac
Sacbee http://www.sacbee.com
Company WordPress Site http://www.thehomeholders.com
Real Living http://www.realliving.com

Video News Story on Loan Modification Scams

admin — Thu, 16 Jul 2009 02:48:36 +0000

http://www.youtube.com/watch?v=BCCg6XK3lCs

Small banks start feeling financial stress

admin — Sun, 05 Jul 2009 16:34:41 +0000

Small banks start feeling financial stress

This By Charles Piller
cpiller@sacbee.com

http://www.sacbee.com/topstories/story/2000836.html

At first, the Sacramento region’s small, business-oriented community banks appeared to have sidestepped the plight of banking titans that staggered under the burden of home mortgage defaults. Now some are showing signs of stress.

Gold Country Bank in Marysville has become the weakest bank of its size in California – below 98 percent of similar banks nationwide, according to Bankrate.com, a leading independent evaluator. It took the place of MetroPacific on June 26, when that Irvine Bank was seized by regulators.

Granite Community Bank in Granite Bay has similar problems, according to data from analysts and the Federal Deposit Insurance Corp.

Nationally, one in five banks lost money in the first quarter of this year. But among this region’s 15 small community banks, two of every five lost money, including Gold Country and Granite Community.

Those and many other small banks rely more heavily on a combination of construction, industrial and commercial real estate loans than on home mortgages and securities. Initially, most coped with the economic collapse.

Not long after the residential mortgage meltdown, construction lending followed the same downward slope. Experts believe commercial mortgages and industrial loans – sensitive to high unemployment and low consumer confidence – are following a similar path.

The impact on banks holding many of those loans could be dire. When banks fail, federal insurance protects deposits up to $250,000 in most cases, but not shareholders’ investments. Local businesses reliant on community banks for credit also could suffer.

Representatives of Gold Country and Granite Community said that despite the challenging economy, they are prepared for any eventuality.

“Everyone in this region is experiencing the same things,” including falling demand for loans and sharply declining property values, said David R. Kaiser, president of Granite Community. “I don’t think I have any more concerns than my counterparts.”

But commercial real estate loans – on which many local banks deeply depend – were recently described by Rep. Carolyn Maloney, D-N.Y., chairwoman of the congressional Joint Economic Committee, as “a ticking time bomb” for massive default problems later this year.

Local challenges

In Yuba County, home of Gold Country Bank, the process already is unfolding.

“There’s a ton of empty commercial space; somebody has got to be making payments on those,” said Steve Brammer, chief operating officer of the Yuba-Sutter Economic Development Corp., a public lending agency. “It’s hard to do that without tenants.”

Lease rates for prime commercial space in Yuba County recently have fallen as much as 40 percent, Brammer said.

“We are starting to see some commercial loans going south,” said Brent Bosanek, owner of the Coldwell Banker Commercial property brokerage in Yuba City, and a former area commercial banker.

“For commercial lending, it’s all about the cash flow,” which declines as leases are renegotiated downward, he said. Lenders from outside the region have contacted his firm to appraise commercial properties, anticipating steep declines in value.

Bosanek added: “Banks are worried.”

Tarra Victorino, Gold Country’s chief financial officer, said the commercial property threat was on her bank’s radar, but that she was “not comfortable” quantifying the possible impact on its business.

“All banks are concerned if the commercial real estate sector suffers the problems that are predicted,” she said.

Several local banks also had far higher rates of commercial and industrial lending than similar banks. Such loans often go bad quickly in a recession, said Foresight Analytics partner Matthew Anderson. “They are even riskier than real estate lending.”

Like some of the other banks, Gold Country also has relatively high levels of restructured loans. This means terms have been changed before the loan comes due.

Troubled banks tend to use the practice, which is legal, to avoid designating loans as delinquent or to forestall foreclosures – delaying bad news from reaching their balance sheets.

New Home Builders Limit Supply

ssiegel — Fri, 11 Jan 2008 19:07:55 +0000

New home analyst, the Gregory Group of Folsom is reporting that new home builders have shut down 10 percent of the regions new home projects. Those closures removed approximately 2800 potential home sites from the market- a likely factor in reducing new home inventories by approximately 31%. This is the first significant drop in inventory levels since the fall of 2005. The Gregory Group found that since June, companies have halted sales in 34 of the region’s 370 new home communities. New home builder’s have finally started to heed their own advice about the need to start restricting the new home supply to spur the market recovery.

Steve Siegel, Coldwell Banker
Email: steve.siegel@cbnorcal.com
mobile: 916.212.5066
www.teamstevehomes.com
Visit our Complimentary Sacramento Area MLS Search

Mortgage Rates And The Federal Reserve

ssiegel — Wed, 12 Dec 2007 18:41:29 +0000

The Federal Reserve reduced the Fed Funds rate yesterday by a quarter point. Wall Street responded with another volatile day of trading and the Dow lost 300 points because of unrealized expectations of an even larger drop in rates.

The bigger question for homeowners and potential buyer’s is how this Fed funds rate drop effects mortgage rates. Actually, mortgage rates follow the bond market, not the Fed funds rate. The interest rate on a 30 year fixed rate mortgage tracks the yield on the 10 year Treasury note. Lenders typically set their base mortgage rate around two percentage points higher than the 10 year bond yield. Rates on adjustable rate mortgages are tied to yields on two, three, and five year Treasuries. These short term loans are more sensitive to Fed rate movements, and those with the shortest maturities see the greatest impact when short term rates rise and fall. So, if you want to know the direction of mortgage rates, you need to get a sense of where bond yields are heading.

Steve Siegel, Coldwell Banker
Email: steve.siegel@cbnorcal.com
mobile: 916.212.5066
www.teamstevehomes.com
Visit our Complimentary Sacramento Area MLS Search

Loan Limits at Fannie Mae and Freddie Mac Kept At Current Levels

ssiegel — Thu, 29 Nov 2007 19:16:42 +0000

The regulator for Fannie Mae and Freddie Mac recently confirmed that the maximum conforming loan limit in 2008 for single family mortgages purchased by the two mortgage-finance companies will remain at this year’s level of $417,000 in most of the US. Higher limits apply to Alaska, Hawaii, Guam and the US Virgin Islands. The conforming loan limit determines the maximum size of a mortgage that Washington, DC based Fannie Mae or Mclean, VA based Freddie Mac may buy or guarantee. Both companies purchase residential mortgages and also package loans into mortgage backed securities for sale to other investors.

US lawmakers have sought to increase the conforming loan limit for the two mortgage finance giants with the hope that Fannie Mae and Freddie Mac could provide some liquidity to the mortgage market, which continues to struggle from the fallout in the subprime sector.

Steve Siegel, Coldwell Banker
Email: steve.siegel@cbnorcal.com
mobile: 916.212.5066
www.teamstevehomes.com
Visit our Complimentary Sacramento Area MLS Search

Placer Ranch Developer Seeks Roseville Annexation

ssiegel — Wed, 28 Nov 2007 20:16:13 +0000

Eli Broad, founder and former chairman of KB Home, recently announced his intention to seek annexation into the city of Roseville for the Placer Ranch development. Placer Ranch is the 2,200 acre developement that has proposed as many as 5,000 new homes, up to 9 million square feet of commercial, office and light industrial land use, as well as a possible California State University campus. Broad has been in discussions with Placer County for years over the costs of providing new services for the project. Annexation approval must come from both Roseville, as well as Placer County.

Coldwell Banker and “Team Steve” Lead the way in Granite Bay and East Roseville

sdailey — Wed, 28 Nov 2007 18:37:40 +0000

If you’re considering selling your home In challenging times like these, it’s more important than ever to place your trust with "leaders". Coldwell Banker is once again the top selling brokerage in the prestigious communities of Granite Bay (zip code 95746) and East Roseville (zip code 95661). Coldwell Banker has approximately 22% market share in Granite Bay and 17% in East Roseville in the last 12 months.

Steve Dailey & Steve Siegel ("Team Steve") have been Realtors with Coldwell Banker in Roseville since 2002. In that time, we have focused largely on Granite Bay and East Roseville, along with other South Placer County communities like Rocklin, Loomis, and Lincoln. During that time, we’ve work with clients on over 30 transactions in Granite Bay alone, and nearly 100 in the South Placer County area. We’ve developed a keen knowledge of area schools, demographics, and neighborhoods, and we have a proven track record in not just "listing" but aggressively marketing and selling our clients’ homes.

If you’re considering a move in the future or would just like a free, no-obligation market analysis from area experts, please e-mail us or give us a call!

Steve Dailey, Coldwell Banker
Email: steven.dailey@cbnorcal.com
mobile: 916.276.9244
www.teamstevehomes.com
Visit our Complimentary Sacramento Area MLS Search

Granite Bay Real Estate Strength Continues Even in Challenging Market

sdailey — Sat, 24 Nov 2007 09:13:28 +0000

By now we are all familiar with the Sacramento region’s "challenging" Real Estate market. However, even in these difficult times there are some shining examples that the best communities perform the best in Real Estate during both good times and bad. Granite Bay is one of the best examples of this.

Overall, prices in the greater Sacramento region have declined approximately 20% during the 2005-2007 downturn. And "transactions" (the number of homes sold) are down even more – 30% to 40% on average. But check out these numbers in Granite Bay (source: Metrolist MLS):

2006: Median Sale Price – $791,000; total homes sold – 270 (22.5 per month)
2007: Median Sale Price – $811,000; total homes sold – 244 as of 11/20/07 (22.9 per month)

The numbers don’t lie! Granite Bay’s median sales price is UP in 2007 by 2.5%, and the number of homes sold per month is up slightly as well! It just goes to show – the old Real Estate adage "location, location, location" still holds true, in good markets and in bad.

Let’s be clear – we’re not saying it would be easy to sell your home in Granite Bay today. In fact, there is almost 9 months of inventory currently in Granite Bay (that’s the number of homes on the market vs the number of homes sold per month). But what we are saying is that Granite Bay continues to be one of if not the best location to own a home in the Sacramento region, and if you do choose to sell you’ll need patience, but you can still expect to receive a solid return on your investment when it does sell.

Steve Dailey, Coldwell Banker
Email: steven.dailey@cbnorcal.com
mobile: 916.276.9244
www.teamstevehomes.com
Visit our Complimentary Sacramento Area MLS Search