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90 STATE OF AFFAIRS: WEST » California RANK: 43 90+ Day Foreclosure Unemployment Delinquency Rate Rate Rate JANUARY 2014 1.84% 0.84% 0.84% YEAR AGO 2.96% 1.55% 1.55% YEAR-OVER-YEAR CHANGE -37.9% -46.1% -46.1% Top County SIERRA COUNTY 90+ Day Foreclosure Delinquency Rate Rate JANUARY 2014 1.87% 2.96% YEAR AGO 1.81% 3.02% YEAR-OVER-YEAR CHANGE 3.5% -2.1% Top Core-Based Statistical Area SUSANVILLE, CA 90+ Day Foreclosure Delinquency Rate Rate JANUARY 2014 2.36% 2.50% YEAR AGO 3.61% 2.62% YEAR-OVER-YEAR CHANGE -34.7% -4.8% note: The 90+ day delinquecy rate is the percentage of outstanding mortgage loans that are seriously delinquent. The foreclosure rate is the percentage of outstanding mortgage loans currently in foreclosure. State rank is based on the January 2014 foreclosure rate. All fi gures are rounded to the nearest decimal. The unemployment rate refl ects preliminary January 2014 fi gures released by the Bureau of Labor Statistics. All other data courtesy of LPS Data & Analytics. IN THE NEWS Former Bank CEO Charged with Bank Fraud, Conspiracy, and Perjury Poppi Metaxas, former president and CEO of Gateway Bank of Oakland, Califor- nia, was charged with bank fraud, bank fraud conspiracy, and perjury in relation to a sham "round trip" transaction. e scheme, initiated by Metaxas, caused Gateway to execute a false transaction in which the bank self-funded a down payment to make it appear that Gateway had sold toxic, non-performing mortgage loans. e announcement was released by the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP). e defendant surrendered to federal agents in California and was arraigned at the federal courthouse in San Francisco. e indictment alleges that in Febru- ary and March 2009, Metaxas attempted to defraud Gateway in connection with Gateway's sale of non-performing mortgage loans (NPLs) to three entities in exchange for $15 million. Allegedly, Metaxas used Gateway Bank to loan money to Ideal Mortgage Bank- ers Ltd., doing business as Lend America, a mortgage lender and Gateway's largest mortgage lending client. Lend America then provided money to three entities that planned to purchase the NPLs. rough a series of wire transfers, Metaxas and others used the proceeds of the sham loan to Lend America to satisfy the 25 percent down payment the three entities owed to Gateway in connection with the sales of the mortgage loans. e intent was to deceive observers and regulators into believ- ing Gateway had removed the toxic assets from its books. "To conceal the fraudulent 'round trip' of the loan funds, in October 2009, Metaxas provided false testimony to the Office of rift Supervision when she was asked about the source of the down payment," the report found. "Metaxas, former president and CEO of Gateway Bank, is charged with cooking the bank's books that were used to review the bank's TARP application by using a 'round trip' transaction to hide the fact that the bank's financial condition was in shambles," said Christy Romero, special inspector gen- eral for TARP. Romero added, "While Gateway's TARP application was pending, its regulators demanded that the bank raise capital and reduce its problem assets. Metaxas allegedly orchestrated a fraudulent scheme to give the appearance that the bank was shoring up its finances by selling problem loans to outside investors." e release notes that charges in the indictment are allegations and that the defendant is presumed innocent until proven guilty. Economic Outlook Positive for Spring Season As it turns out, the entire U.S. economy has been suffering from seasonal affective disorder. According to the UCLA Anderson Forecast, the one-two punch of harsh winter weather in the East and a nagging drought in the West (namely California) stalled industries from real estate to factory produc- tion, putting a tight chokehold on the national economy. However, according to its latest economic outlook report, Anderson expects the na- tional GDP to grow by roughly 3 percent now that warmer and wetter spring weather is here. Moreover, as the GDP rises, increased housing and business investments and con- sumer spending should keep that growth rate steady through 2016. Accordingly, as the U.S. GDP grows, so should grow job opportunities and salaries. In March, Freddie Mac announced that it expects home sales to grow along with wages this year, despite a still-tough job market in most sectors. Mirroring UCLA's GDP predictions, Freddie is projecting a 3 percent rise in home sales and a 20 percent rise in new home construction in 2014, which the agency expects to level out to a 5 percent overall growth. In the report, UCLA Anderson Forecast senior economist David Shulman stated: "We can visualize the economy creating between 200,000 and 250,000 jobs a month, with the unemployment rate dropping to 5.4 percent by late 2016. Total payroll employment will surpass the prior 2007 peak, but the economy will remain well below its pre-Great Reces- sion growth path." Shulman's words echo Freddie's, which stated recently that construction and manu- facturing jobs, though still struggling, are on a steady rise. Construction is roughly 80 percent of its 2007 peak and manufacturing at about 90 percent, according to the GSE. Shulman also expects the core consumer price index to increase from 1.8 percent (its 2013 low) to 2.5 percent by 2016. is uptick in inflation, he says, should bring a correspond- ing—and much welcomed—rise in salaries nationally, as much as 4 percent this year. is, of course, bolsters a recovering housing market as more money and more stable jobs generate more interest in homebuying among U.S. workers. Shulman also says that the Federal Reserve's long experiments with zero-interest rates and quantitative easing are slowly waning. He expects that the monthly bond buying program, once at $85 billion and now at $55 billion, will essentially ground to a halt by September. "We forecast that the federal funds rate will rise, to use 'Fedspeak,' at a measured pace, reaching 3 percent by the end of 2016," Shulman said. Specific to California, UCLA Anderson Forecast senior economist Jerry Nickelsburg that the state's lingering drought choked its four main economic engines—agriculture,

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