Saturday, August 18, 2012

Mortgage loans boost results for Wells Fargo - USATODAY.com

Wells Fargo reported higher earnings, higher revenue and a record number of mortgage applications on Friday.

It's just that nobody was paying all that much attention.

The spotlight instead was on JPMorgan Chase, where executives fielded questions about a giant $5.8 billion trading loss.

Then again, that's the way Wells Fargo usually works: getting ahead by staying under the radar.

The comparison was not lost on Wells Fargo's chief financial officer, Tim Sloan.
"It's not that we don't make mistakes," he said in an interview with the Associated Press. "But we don't take on a risk and then decide that the way we get comfortable with it is by hedging it. We just don't do it in the first place."

The bank, based in San Francisco far from its New York peers, was considered a large regional bank until the end of 2008, when it stepped onto the national scene by scooping up Wachovia, a major bank in the South that was teetering on the brink of collapse.

Wells Fargo has since staked its reputation on mortgages, churning out more loans than any other bank. It's fond of pointing out that, at least compared with peers, it relies more on plain-vanilla customer lending than investment-banking services that can carry big profits but also big risk. It's now the biggest U.S. bank by market value, a crown it took from JPMorgan.

When Moody's downgraded the ratings of most of the major banks last month, Wells Fargo escaped intact.

The Associated PressPosted Jul 14, 2012



Mortgage loans boost results for Wells Fargo - USATODAY.com

New project meets demand - USATODAY.com

Windrose Estates residents in Scottsdale have a home where the buffalo used to roam.

The infill development of 23 homes at 94th Street and Sweetwater Avenue is built on Collin "T.C." Thorstenson's former buffalo ranch. He had horses and a herd of 20 buffaloes on a property surrounded by suburban homes.

Odyssey Homes started building Windrose Estates five years ago but did not get far before the housing market went over a cliff.

Scottsdale-based Camelot Homes bought the distressed property in May 2011 and revived the development with a model home completed in November, said Mark Hancock, company president.

Camelot has sold 21 of 23 homes in Windrose Estates at an average price of $656,000, he said, with one lot and one spec home still available.

"It shocked us how quickly these homes sold," Hancock said. "It was really an amazing amount of pent-up demand."

Camelot picked up the buffalo-ranch site for Windrose Estates and found eager buyers right out of the chute.

"This is the best product we've had in the last four or five years," Hancock said.
The first resident moved into the gated community in late January. Seven other residents have since closed on their homes and four more are scheduled to do so in July and August, said Cammie Beckert, Camelot marketing director.

Windrose Estates includes one- and two-story homes of 2,882 to 4,200 square feet.
Camelot is planning to offer a similar home product with new options at another infill site it's ready to launch.

Camelot Reserve includes 20 lots, each about 10,000 square feet, southwest of 78th Street and McDonald Drive. The roads and entry features have already been completed.

By Peter Corbett, The Republicazcentral.comPosted Jul 14, 2012



New project meets demand - USATODAY.com

Apartments, retail round out Scottsdale Waterfront

The final phases of the Scottsdale Waterfront will include 259 apartment units and 10,000 square feet of retail/restaurant space encompassing all of the land between Marshall Way and Goldwater Boulevard.

Alliance Residential Holdings recently submitted its site plan for Broadstone Waterfront to the Scottsdale Current Planning Department. The Planning Commission is tentatively scheduled to consider the proposal at its Aug. 8 meeting.

The Waterfront project is expected to be under construction in the fourth quarter.

The request does not include a rezoning, said Dan Symer, senior city planner. In May 2011, the City Council approved amended development standards needed to plan the final phases of the project.

Symer said the units will be apartments.

"They submitted a site plan to demonstrate compliance with their stipulations," he said. "It's just locking down the site plan. We didn't have anything on the site before and now we know where the building is going to be and where the open space is going to be."

The two parcels where the complex will be built total 3.35 acres. The project was approved with an allowable residential-unit count of 259 and 10,000 square feet of restaurant/retail for a total building area of 398,000 square feet. However, the site plan includes a total building area of about 300,000 square feet.

The site plan includes a single building that wraps around a center courtyard, with restaurant and retail located along Marshall. The building height along Marshall will vary from 48 to 65 feet.

The building height along Goldwater will vary from 38 to 50 feet, and more than 50 percent of the building will be three and four stories.

The site plan also includes a two-story fitness center and first-floor residential along the Arizona Canal.

According to the request, Broadstone Waterfront will be a "vibrant mixed-use project with luxury multifamily residential with retail/restaurant uses constructed over an underground parking structure that will complete the Scottsdale Waterfront."

The site will consist of more than 53 percent open space. The two-level, underground parking garage will include 425 spaces.

The site plan will go before the Development Review Board and Planning Commission, and then will be considered by the City Council.

Alliance Residential Holdings also is developing Broadstone on Lincoln, a 264-unit apartment complex northwest of Scottsdale Road and Lincoln Drive.

Broadstone Waterfront and Broadstone on Lincoln are among 18 apartment projects that would add about 5,700 apartments citywide.

Ian Swiergol, Alliance Residential's managing director, couldn't be reached for comment.

by Edward Gately - Jul. 16, 2012 The Republic | azcentral.com



Apartments, retail round out Scottsdale Waterfront

Developer gets CityNorth land

CityNorth and Desert Ridge, once expected to be the crown jewels of Phoenix's expansion into empty lands north of Loop 101 in northeast Phoenix, have been turned over to a new developer.

As a result of a long, detailed lawsuit, Gray Development Group of Phoenix has won control of the undeveloped 140 acres of CityNorth and with it, master developer responsibilities at Desert Ridge.

Desert Ridge is a 5,700-acre master-planned development centered at Tatum Boulevard and Loop 101. CityNorth, located on the northwest corner of 56th Street and Loop 101, is planned as a large, multiple-use development with upscale shopping, homes and hotels.

A group called Northeast Phoenix Partners controlled the land after winning the initial auction of the Desert Ridge commercial core in 1993. The Klutznick Co., the original developers of CityNorth, took over the partnership several years later.

NPP got into trouble when exercising its rights as master developer clashed with Gray.

Gray, a developer of upscale apartments in the Valley, had purchased land north of Desert Ridge Marketplace in 2004, and it later won zoning variances for the property that enabled it to add density to the project.

NPP, which enforced the covenants, conditions and restrictions for the entire Desert Ridge area, challenged the variances and lost. In the process, Gray countersued, arguing that NPP and the Klutznick Co. interfered with its efforts to develop the land. Gray eventually defaulted on the property, and it remains vacant.

Gray won a $110.7 million jury verdict in the case in 2010.

NPP/Klutznick, meanwhile, defaulted on Phase 1 of CityNorth and lost a portion of the property. It has been unable to develop the land further.

NPP, unable to pay the verdict, entered into mediated negotiations with Gray, which accepted the land and master developer rights in a settlement. That activity took place over the past month, and the deal was recently closed.

It is unknown now what Gray will do with the property. Company president Bruce Gray was unavailable for comment.

The principals of the Klutznick Co., John and Daniel Klutznick, closed up shop and moved out of town a year ago.

They were not available for comment.

Since the mediation began, lawyers in the case have not commented.

Others involved in the growth and development of Desert Ridge were pleased that the lawsuit is over.

Former Phoenix City Councilwoman Peggy Neely, who as a representative for the area was deeply involved in the dispute and Desert Ridge generally, said she hopes growth in the area can resume now that the legal cloud has dissipated.

"Hopefully the future of Desert Ridge can once again move forward with the settlement of this lawsuit," she said, "and the community and the city can again see this highly desirable area become a productive commercial and residential community again."

Doug Dickson, president of the Desert Ridge Community Association, said the resolution should help clarify the future of CityNorth.

"To the extent that this accelerates growth in the retail and commercial development of Desert Ridge, it is a positive and welcomed event for our community."

by Michael Clancy - Jul. 15, 2012 The Republic | azcentral.com



Developer gets CityNorth land

More homes faced foreclosure risk in June – USATODAY.com

LOS ANGELES – Banks are increasingly placing homes with unpaid mortgages on a countdown that could deliver a swell of new foreclosed properties to the housing market by early next year, potentially weighing further on home values.

June provided the latest evidence of this trend, as the number of U.S. homes entering the foreclosure process for the first time increased on an annual basis for the second month in a row, foreclosure listing firm RealtyTrac said Thursday.

California in particular saw a big spike in foreclosure starts, or homes placed on the foreclosure path for the first time. They increased 18% vs. June last year, the firm said.

The increase in foreclosure starts comes as banks make up for time lost last year as the mortgage-lending industry grappled with allegations that it had processed foreclosures without verifying documents.

The nation's biggest mortgage lenders reached a $25 billion settlement of that issue in February with state officials, which has cleared the way for banks to address their backlog of unpaid mortgages.

Lenders initiated foreclosure on 12% of the loans behind in payment in June — the highest level since the first half of 2009, according to Fitch Ratings.

"These properties that are starting the foreclosure process are mostly homeowners who likely have been missing their payments for a year or more and just now are officially starting the foreclosure process," said Daren Blomquist, a vice president at RealtyTrac.

That means the latest crop of homes entering foreclosure does not signal that there is a fresh wave of homeowners in distress and missing payments.

Still, the increase in foreclosure starts sets the stage for a potential increase in homes sold at a discount via short sale, when the lender agrees to accept less than what is owed on the seller's mortgage. Others could end up taken back by banks and placed on the market at a sharp discount.

Either way, short of homeowners obtaining loan modifications or otherwise arranging to exit the foreclosure process, many of these properties could end up adding to the inventory of foreclosed homes on the market, dragging down the values of nearby homes.

Those homes may not hit the market for many months, however.

In the second quarter, it took an average of 378 days for a home to complete the foreclosure process, or the point when a bank takes over the property, RealtyTrac said. That's up from an average of 370 days the first three months of the year and a record going back to the first quarter of 2007, the firm said.

In New York, it took an average of 1,001 days for the foreclosure process to run its course in the second quarter, down from 1,056 days in the first quarter.

Of homes that entered the foreclosure process in June, those that end up as bank-owned properties would likely hit the market a year from now, Blomquist said.

"However, if they take the short sale route, it may be sooner," he said.

Short sales take, on average, 319 days to sell from the time they enter foreclosure.
A stronger housing market could mitigate the impact of future foreclosures on home prices, and home sales are expected to end up ahead of last year. But many economists still say the market is years away from a full recovery.

There are some 3 million U.S. homes behind on their mortgages, according to the Mortgage Bankers Association.

An additional 629,000 homes were on banks' books as of June, but not yet sold. That translates into a 15-month supply, at the current pace of sales, according to RealtyTrac.

And nearly 13 million home loans are underwater, or owing more than the house is worth. Those properties could be at higher risk for entering the foreclosure process.
Even so, the backlog in foreclosures that banks are still dealing with has slowed the pace of home repossessions.

RealtyTrac forecasts some 700,000 homes will be repossessed by lenders this year, down from about 1 million last year.

By Alex Veiga, Associated Press Updated Jul 12, 2012



More homes faced foreclosure risk in June – USATODAY.com

Scottsdale panel OKs beach-club permits - USATODAY.com

The Scottsdale Planning Commission has endorsed several permits for Triyar Entertainment's beach-club-anchored complex in Scottsdale's downtown entertainment district.

The requests will go to the City Council for final consideration.

Demolition has been completed, and Scottsdale Retail Plaza is under construction on most of the block that housed Myst nightclub on Shoeman Lane and Suede restaurant and bar on Indian Plaza.

With a single, unanimous vote and no discussion, the commission on Wednesday recommended the City Council approve the following:

Conditional-use permits for a bar and live entertainment for Triyar's beach club, which will include a 9,700-square-foot indoor bar and 17,600 square feet of outdoor pool and patio areas. The club will be in the center of the complex.

Conditional-use permits for a bar and live entertainment for Riot Hospitality Group's Whiskey Row, a modern Western saloon on the eastern side of the complex. Riot Hospitality Group owns El Hefe Super Macho Taqueria.

A conditional-use permit for a bar for Munchbar, Les Corieri's latest venue. The sports bar will be on the eastern side of the complex.

The council will consider the permits at its Aug. 21 meeting.

Bill Crawford, president of the Association to Preserve Downtown Scottsdale's Quality of Life, said he didn't attend the meeting because "it is a rubber-stamp process and will be approved no matter what."

He has been vocal in his opposition to the complex, saying noise from live music will keep neighbors from sleeping and ruin their quality of life.

Commission Chairman Michael D'Andrea said Triyar is "taking out what I see to be a deteriorating block and doing a nice project."

"Obviously there was no opposition here, so I think the reason it went through is because people knew in the original application that there were going to be restaurants, bar-type uses that would require those permits," he said.

The floor plan for the beach club shows that live entertainment will occur in the outdoor patio area, and all outdoor speakers will be mounted to direct sound toward the pool area and downward. Live entertainment at Whiskey Row will occur inside the building, and the speakers will be placed to reduce amplified noise outside.

Jason Morris, a zoning attorney representing Triyar, said he wasn't surprised no one spoke in opposition to the permits.

"I think it says two things," he said. "First of all, we've made a tremendous effort to reach out to the neighborhood, to make sure that not only adjacent property owners but the public were aware and supportive of what we're doing. Secondly, it says we really have met all of the standards that are associated with a use permit, and we dealt through the zoning case with all of the contentious issues."

By Edward Gately, The Republic|azcentral.comPosted Jul 18, 2012



Scottsdale panel OKs beach-club permits - USATODAY.com

Small businesses buying up office space with US loans - USATODAY.com

Las Vegas dentist Chris Cozine wanted to cut costs after the Great Recession. He found an unlikely way: He ditched the office he was renting and bought 6,600 square feet of his own.

Besides improving his surroundings -- he left the gray walls of the old place in favor of an open layout with modern glass tiles and a mix of colors -- Cozine is paying $1,800 a month less on the mortgage than he was paying in rent.

"I save money, but the icing on the cake is that the office decor is of my choice," Cozine says.

At an otherwise bleak time for real estate, there's a mini-boom in one corner of commercial property. Dentists like Cozine, restaurant owners, doctors and other business owners are snapping up space in vacant strip malls and office buildings.

They're doing it with help from a government loan program for small businesses that has been around since 1959 but has shot up in popularity since the end of the recession, with private lenders wary about extending real estate loans.

The amount of small businesses loans under this program rose at an annual rate of 16 percent in the three years after the end of the recession in 2009 to $4.45 billion, according to the Small Business Administration. After the 2008 financial crisis, banks were so reluctant to lend that 27percent of such loans disappeared in 2009.

It's a good time to be a buyer now. Commercial real estate prices are at rock bottom, fallen 30 percent from the peak nationally. And interest rates -- for those who can get loans, anyway -- are at historic lows.

However, small businesses balk at the 25percent required up front for a typical loan, especially at a time when they have worked hard to save cash after surviving a brutal recession.

"Cash is a security blanket for small businesses, and they would be scared to put a big check down now," says George Smith, head of business banking at Bank of America.
But these government-backed loans make it enticing. Business owners are required to put up a down payment of just 10 percent, compared with the 25percent to 40percent demanded in a commercial property loan.

The attraction for banks is that it is a less risky loan, because they commit only 50percent of the loan, while the government shoulders 40percent that's left over.
"Our job is to keep credit flowing when times are tough," says Jeanne Hulit, associate administrator capital access at the Small Business Administration.

The SBA didn't provide default rates for the loans. But Scott Geller, CEO of business banking at JPMorgan Chase, says these loans typically have had superior performance in a portfolio of commercial real estate loans. That's because one of the requirements of the loan is that the property is primarily occupied by the borrower.
Owners that occupy the building space are more likely to pay back their loans, unlike an investment property where if renters leave, borrowers are more likely to default unless they find another business to lease it.

At some banks, the numbers of these loans have soared. In the first three months of this year, such government-backed loans grew by 16percent, after growing 23percent for all of 2011, at JPMorgan Chase. At Bank of America, which didn't provide the latest numbers, such loans grew by 20percent last year.

Who qualifies for the loans, termed SBA 504, depends on the industry. For the most part, government rules require that the business have less than $5 million in income and fewer than 500 employees.

The loans are typically for 20 years -- compared with the standard 30 years for most fixed-rate home loans -- and come with interest rates that are slightly below market rates.

It was a winner for Gary and Zell Dwelley, the husband-and-wife owners of Beach Break Cafe in Oceanside, Calif., just north of San Diego. They had leased their restaurant space for 22 years and wanted something bigger to fit the 500-odd customers who file in on Sundays for their popular coffeecakes and banana crunch French toast.

"What we really felt bad about was that we only had one bathroom, which wasn't even handicapped-accessible," Zell Dwelley says.

By Pallavi Gogoi, Associated PressPosted Jul 12, 2012


Small businesses buying up office space with US loans - USATODAY.com

Hotel going up in Tempe a symbol of rejuvenation

Downtown Tempe businesses see construction of a Residence Inn by Marriott hotel as a sign that commerce in the Mill Avenue District is on the mend from a difficult economy.

Nancy Hormann, president of the Downtown Tempe Community, which manages the Mill Avenue District for landowners, considers the new hotel that is under construction at Forest Avenue and Fifth Street a boost for downtown merchants.

Hormann said downtown business owners are so delighted that they are referring to the towering crane at the hotel-construction site as the "official bird of downtown Tempe."

The hotel is expected to open late next year or in early 2014.

After struggling through the tough economy, which stalled many high-profile Valley developments, including the Tempe Marriott hotel, business owners are looking forward to the increased foot traffic expected downtown when the hotel opens.

"To have cranes, to have building going on, it's ... like, 'OK, we're on the rise again,' " Hormann said. "Having that long-awaited development actually happen, really, to me, shows that our economy is turning around and, as we predicted, downtown Tempe is being one of the first to benefit."

Construction on the 173-room, 11-story hotel was supposed to start in early 2008, but the project was stalled when the economy nosedived.

The Residence Inn is just east of City Hall and across the street from Tempe police headquarters.

The site once was home of the popular Bandersnatch Brew Pub, a bar and microbrewery.

As part of the developer's agreement with the city, Tempe built a parking garage next to the lot to serve the hotel and city employees.

But when the economy crashed and construction on the hotel stalled, the garage became the backdrop for an acre of dirt. The garage includes retail and business space that Tempe development officials predicted would be leased when the hotel was constructed.

In 2010, the Downtown Tempe Community built an urban-community garden on the empty lot to improve the site until the economy turned.

The garden closed last year when plans were announced that construction on the hotel would start within the year.

The hotel will have suites with kitchens. Amenities will include 3,600 square feet of meeting space, a restaurant, business center, fitness center and rooftop pool and fire pit, according to the website of Florida-based developer Finvarb Group.

by Dianna M. Náñez - Jul. 9, 2012 The Republic | azcentral.com



Hotel going up in Tempe a symbol of rejuvenation

Meritage: Offering will build capital - USATODAY.com

Meritage Homes Corp. initiated a public offering Monday for up to 2 million additional shares of stock, according to documents filed with the U.S. Securities and Exchange Commission.

The Scottsdale-based homebuilder plans to use proceeds from the offering for working capital and other general purposes, according to a company news release.

The public offering is being managed by Citigroup, JPMorgan, Deutsche Bank Securities and Merrill Lynch, Meritage Homes officials said.

Meritage Homes shares trade on the New York Stock Exchange under the symbol MTH.
Trading activity in the wake of the offering announcement pushed the company's share price up 21cents, or 0.6percent, to close at $35.38, below the 52-week high of $35.45 reached earlier on Monday.

The stock's 52-week low is $13.68 a share.

The homebuilding industry has made a significant comeback in Arizona during the past year, with the current year's new-home permits on pace to double last year's total of about 7,000 permits.

Now that new-home demand is up, some builders have been looking for ways to generate additional capital to produce more homes.

By J. Craig Anderson, The Republic|azcentral.comPosted Jul 10 2012

Meritage: Offering will build capital - USATODAY.com

Valley bankruptcy filings drop - USATODAY.com

Amid signs that consumers are getting a better handle on their finances, metro Phoenix bankruptcy filings fell another 27 percent in June.

The 1,770 Phoenix area filings last month brought the total for the first half of the year to 10,867, down nearly 24percent from the 14,271 in the first half of 2011, the U.S. Bankruptcy Court for Arizona reported. The statistics cover January through June.

The numbers were in line with a statewide filing drop of 25 percent in June and 23 percent over the first six months of the year. Both sets of statistics mirrored the national trend, in which filings fell 18 percent in June from a year earlier, with a decline of 14 percent in the first half of the year.

"We are on pace for perhaps the lowest total (of) new bankruptcies since before the financial crisis in 2008," said Samuel Gerdano, executive director of the American Bankruptcy Institute, which released the national figures along with Epiq Systems Inc.
The release of bankruptcy figures follows a report last week by the American Bankers Association showing that Americans are back to pre-recession levels in terms of making payments on time.

Delinquencies fell in 10 or 11 loan categories tracked by the association for the first quarter. The composite results for eight types of installment loans were the best since 2007. Some 2.35 percent of these loans were 30 or more days past due, falling from 2.49 percent in last year's fourth quarter. Delinquencies for these loans -- which include those for autos, mobile homes and home equity -- also are below the 15 year average of 2.4 percent.

Bank credit-card delinquencies also eased, falling to 3.08 percent in the first quarter from 3.17 percent.

"Consumers have done a remarkable job getting their finances under control," said James Chessen, chief economist for the American Bankers Association.
Considering that retail gasoline prices have fallen noticeably since the first quarter, he sees further improvement going forward, with less pressure on consumer wallets.

Chapter 7 filings, which allow debtors a fresh start after non-exempt assets are used to pay creditors, accounted for 86 percent of metro Phoenix bankruptcies, both in June and for the first half of the year. Chapter 13 debt-reorganization plans accounted for most of the rest.

By Russ Wiles, The Republic|azcentral.comPosted Jul 10, 2012

Valley bankruptcy filings drop - USATODAY.com

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