Long Beach, CA. As California grapples with the largest State deficit on record, it has cut off the $10000 tax credit for first time home buyers seeking money back for investing in new constructed housing, Sacramento announced last week.
Will California be able to balance its budget in time to avoid massive lay offs? Or, will it continue to, “kick the can down the alley,” as the Governor likes to say in regard to the legislatures inability to address formulating a government that spends within its means?
Last Thursday, the State of California began issuing IOUs in lieu of its normal checks as an emergency measure on how to deal with the situation….Today, Wells Fargo decided to tell the State of California they will accept their IOU's until July 10th. Thereafter, they will no longer accept the IOU's for deposit. We understand BofA has said the same thing:
Wells Fargo & Company (NYSE:WFC) said today it will accept registered warrants issued by the State of California from its retail and business customers for a limited time. It will begin accepting the registered warrants for deposit on July 2, 2009 and stop accepting them no later than July 10, 2009. “We’re very disappointed, as are many Californians, that California has taken the unfortunate step of issuing IOUs in lieu of its payments to some businesses and individuals,” said Lisa Stevens, head of Community Banking for Wells Fargo in California. “Wells Fargo has a long history of taking extraordinary measures to help our customers and will accept registered warrants from our customers, but only for a limited time, to allow them time to make other arrangements. We are reluctant to take this step, but are doing so to help our customers who are not at fault and with the expectation that the Legislature and Governor will complete the budget within days. We join all Californians in urging our Legislature and our Governor to take the appropriate steps as soon as possible to resolve this budget crisis.”
This week a flood of treasuries:
There will be an auction this week of 65 Billion in treasuries. If demand is not real strong, it will mean that our rates cannot go lower than the level you are currently seeing and you should consider locking your rate depending on how the market absorbs this large amount of bonds.
Kirk Mulhearn, a Long Beach Real Estate Broker co-manages Prudential California Realty, "The Bixby Knolls Office," and a Net Branch of, GEM Mortgage, a direct lender specializing in FHA, VA, and Conventional financing. Contact him at: 562-989-4608 ext. 110
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