Doom du Jour No. 6

It's one thing to hear about folks in California losing their houses. It's another to hear about people losing their houses and having trouble finding enough food for Thanksgiving. Something about the lack of holiday food really troubles me.

Hard times and long lines for Southern Californians

Thousands turn out for separate offerings of free food and mortgage help. Some leave empty-handed.

By Ruben Vives, Bob Pool and Rong-Gong Lin II

November 23, 2008

Some sought a cart of groceries the week before Thanksgiving, others sought a way to keep from losing their homes in the new year. By the thousands, a diverse group of Southern Californians converged on two events Saturday aimed at helping families in hard economic times.

The problems, and the aid offered, were vastly different. But both reflected the worries and needs of many.

In Montebello, nearly 5,000 turned out for a food giveaway, a number that stunned organizers who had tried to keep it a low-key event, targeting publicity to several churches and schools. But word of mouth proved stronger than a few fliers, and crowds inundated Montebello Park. A diverse mix of people stood in a six-hour-long line -- families from middle- and working-class communities, including Pico Rivera, Montebello, Norwalk and Whittier. No one left empty-handed, though.

In Van Nuys, about 2,000 homeowners attended a workshop promoted as Home Preservation Day. But this was not about how to lay tile or install plumbing. A bank had mailed notices to homeowners in trouble with their mortgages, and Saturday offered them a chance to rework the terms of their loans. Bankers had hoped 100 would turn out, and planned for 200. Loan counselors had time to meet with a fraction of homeowners and some were turned away.

Filling empty cupboards

Just a few paychecks ago, Betty Gillis, 44, was volunteering at a food pantry, handing out food to the needy. Saturday, she found herself on the receiving end of a food giveaway.

Last month, the Whittier pharmacy technician was juggling two jobs to support her disabled husband, mother-in-law, and college student daughter. But her full-time employer cut her hours because there were too few customers. Her bosses also required her to work on weekends, forcing her to quit her second job -- and the money ran out.

So on Saturday, Gillis stood in a block-long line at Montebello Park and accepted a cart-full of groceries for Thanksgiving week.

"My daughter asked me the other day, 'Are we so poor that we have to stand in line for food?' And I said, 'Yeah,' " Gillis said.

The scene in Montebello reflected the crisis confronting local food banks struggling to keep up with demand that has surged more than 40% since last year, according to Los Angeles Regional Food Bank. New to food lines are middle-class families -- including some that until recently earned $70,000 a year.

"We're used to seeing low-income people and seniors on a fixed income coming in. Now we're seeing more and more middle-class people coming in -- people who just lost their job, are trying to pay their mortgage, or tapping into their 401(k) because of the huge financial losses," said Darren Hoffman, a spokesman for the regional food bank.

Saturday's event was sponsored by Heart of Compassion, a Montebello faith-based nonprofit food bank. Organizers were surprised by the large turnout -- more than double than expected -- because they did not heavily advertise the event.

But before dawn, a line of 500 had already gathered in the park for the 10 a.m. opening. By noon, thousands of people stood in the warm November sun. Those in line hardly spoke, gazing into the park or holding on to restless children.

When they approached the makeshift food bank -- a collection of blue-and-white tents in a parking lot -- each family took a metal shopping cart and steered it down a line of volunteers, receiving bags of oranges, cantaloupes, celery, cereal, tomatoes, pumpkin pies, yogurt, bottles of cooking oil and loaves of bread, among other items.

Natalie Gomez, 25, held her purse and a single balloon for her 4-year-old daughter, who fidgeted during the five-hour wait. The Montebello woman said her husband's employer, a printing company, cut his hours because of decreasing business.

"It's my first time here at an event like this," said Gomez in a quiet, tired voice.

Martha Garcia, 36, of Pico Rivera, said she needed the donated food to offer some semblance of a feast this week. Garcia said most of her money is being saved for her 10-month-old son, who needs surgery.

The donated food will help, she said. But there were no turkeys available.

"On Thanksgiving," she said, "I won't have enough food."

Looking for breaks

Homeowners in Van Nuys received food for thought Saturday for their most nail-biting problem: making the monthly mortgage payment.

In a move designed to help troubled homeowners, IndyMac Federal Bank, the Federal Deposit Insurance Corp. and Los Angeles Neighborhood Housing Service sent letters to 4,000 local residents inviting them to attend a so-called Home Preservation Day. The FDIC, which took over troubled IndyMac in July, launched the loan modification program in August.

The program's goal is to reduce monthly mortgage costs to a maximum of 38% of the borrower's pretax income. IndyMac officials calculate that can save the typical borrower $380 a month.

Saturday's event drew thousands -- husbands and wives and children -- and was so large that organizers began the workshop an hour early and continued it longer than planned. Still, about half of those who showed up were turned away and advised they would be contacted later by phone.

Inside a large room at the San Fernando Valley municipal center, homeowners huddled with counselors, talking in hushed tones about private family finances.

Making a stressful situation worse, those waiting outside filled out long forms and voiced frustration over the complexities of modifying a home loan.

Only about a third of the 300 customers who were able to meet face-to-face with counselors were offered a loan modification.

To the dismay of many, property owners discovered that they have to be behind at least two months with their mortgage and facing foreclosure before they can restructure their home loan.

David Kimes, 74, of North Hollywood, was among those who made the cut. He is a general contractor whose work has shriveled 92% this year because of the economy.

"I have an adjustable rate mortgage coming due in 2012. I want to stay in my house until I die," he said. "They told me they'd see what they could do."

But some of those not yet behind in their payments complained that bankers need to do more to prevent looming loan defaults and home foreclosures.

"Why do you want to screw up the people who are making their payments and trying to avoid foreclosure?" demanded Constantine Metallinos, a 59-year-old real estate broker from Agua Dulce. "You are forcing us into default before you'll help us. People who are good citizens get penalized."

IndyMac spokesman Evan Wagner was sympathetic. But he said his Pasadena-based thrift is limited in its flexibility to rework loans.

"We're stuck enforcing existing contractual agreements" with outside institutions that own about 93% of IndyMac's loans, Wagner said.

"The program is evolving. We're helping people today who we couldn't help a month ago," he said. But loan modifications are "not about a better deal. . . . There's no principal reduction."

Those who qualify can have their loan interest rate lowered or the terms of the loan changed to stretch payments out 40 years instead of 30.

Evans said a second Home Preservation Day is planned for Dec. 2 in Riverside. He said the hundreds who walked away without any sort of loan modification offer Saturday should call IndyMac and try again.

Northridge resident Michael Sharp might want to take that advice after being told he and his wife, Susan, did not qualify.

Sharp, a 48-year-old carpenter, owes $620,000 on the home the couple bought four years ago for $565,000. The monthly mortgage of $4,000 will jump in two years when an adjustable rate kicks in.

His wife is employed as a communications technician, but his work is drying up, Sharp said. "It would be foolish to say I'm not afraid," he said. Added his wife: "In two or three months it will be a disaster. Right now we're holding on, but the future doesn't look like it's going to be any better than it is right now."

Vives, Pool and Lin are Times staff writers.

ruben.vives@latimes.com

bob.pool@latimes.com

ron.lin@latimes.com

Scary Times

I should let this story speak for itself. I'm just saying: 40,000 hungry people? It's not good.

Thousands pick up free vegetables on Colorado farm

Sun Nov 23, 2:46 pm ET

PLATTEVILLE, Colo. – A farm couple got a huge surprise when they opened their fields to anyone who wanted to pick up free vegetables left over after the harvest — 40,000 people showed up.

 

Joe and Chris Miller's fields were picked so clean Saturday that a second day of gleaning — the ancient practice of picking up leftover food in farm fields — was canceled Sunday.

 

"Overwhelmed is putting it mildly," Chris Miller said. "People obviously need food."

 

She said she expected 5,000 to 10,000 people would show up Saturday to collect free potatoes, carrots and leeks. Instead, an estimated 11,000 vehicles snaked around cornfields and backed up more than two miles. About 30 acres of the 600-acre farm 37 miles north of Denver became a parking lot.

 

Some people parked their cars along two nearby highways to take to the field with sacks, wagons and barrels.

 

"Everybody is so depressed about the economy," said Sandra Justice of Greeley, who works at a technology company. "This was a pure party. Everybody having a a great time getting something for free."

 

Justice and her mother and son picked 10 bags of vegetables.

 

Miller said they opened the farm to the free public harvest for the first time this year after hearing reports of food being stolen from churches. It was meant as a thank you for customers.

Farm operations manager Dave Patterson said that in previous years the Millers allowed schoolchildren and some church groups to come to the farm during the fall to harvest their own food.

 

He estimated some 600,000 pounds of produce was harvested Saturday.

 

Weld County sheriff's deputies helped direct traffic and the Colorado State Patrol issued citations for cars illegally parked on the side of the road.

___

Information from: The Denver Post, http://www.denverpost.com

Doom du Jour No. 3

From the Wall Street Journal:

A Different Banking Crisis in Need of Fresh Capital

By ROBERT A. GUTH and ROGER THUROW

As the nation's financial crisis spread earlier this fall, several thousand people pressed forward in a line to make a withdrawal from a bank in suburban San Diego.

The line stretched out the building, up the street and past the fire station. They walked away with boxes filled not with money but vegetables, fruit, pasta and juice.

It was a run on a food bank.

As the economy sours, the nation's food banks are struggling to feed a surge of Americans worried about finding their next meal. The challenge remains great even in the face of significant infusions of assistance from corporate America. On Wednesday, Wal-Mart Stores Inc. began offering food banks food from its stores nationwide and also boosted its cash contributions, while Wells Fargo & Co. is expected to announce Thursday an increase of its donations to food programs. The two companies expand a list of recent high-profile cash donors to food programs, including Kraft Foods Inc., Ford Motor Co., Newman's Own Inc. and billionaire Kirk Kerkorian's philanthropic foundation.

The long lines and the rush to cope with them expose America's persistent hunger problem and the challenges facing the institutions fighting it. Over the past decade, changes in what Americans eat and how food makers feed that appetite has cut food donations to food banks while boosting food banks' costs. Food banks were already grappling with these changes when the economic downturn hit. The rush of recent donations could help alleviate some of their problems. But the lengthening food lines threaten to outpace the assistance.

In the past two decades, a vast system of food banks has evolved to support the millions of people in the U.S. -- one in nine households last year -- that have difficulty affording enough food for all their family members at some time during the year. The food banks are basically depots that collect bulk food and repackage it for food pantries and soup kitchens to distribute to the needy. The largest of those food-bank organizations, Feeding America, coordinates a network of about 200 food banks serving more than 63,000 pantries and soup kitchens nationwide.

The food banks historically depended on food donations from food manufacturers and large supermarket chains. But in recent years, production of canned food, long a main staple of the food-bank business, has steadily fallen as American preferences shifted toward fresh food. Food from U.S. government programs in recent years has also dropped.

That change is compounded by higher efficiencies in food production and distribution. Manufacturers and retailers can better predict demand for products now, and produce fewer damaged cans and broken boxes -- items that would have traditionally gone to food banks. The rise of dollar stores and other low-priced retailers gives food makers a new outlet for excess food and a chance to recoup some of their costs, a benefit not offered by many food banks.

All this means less food for food banks. So they're buying more of their own food and moving to fresh foods, which are more nutritious than packaged food but are also more expensive to handle. Others are setting up kitchens to mix fresh ingredients into prepared meals that can be frozen. All are trying to boost cash donations to cover the growing cost of food and the infrastructure -- like freezers and refrigerated trucks -- for storing and transporting fresh food.

The economic shock didn't help. Food and gas prices soared early this year. And even as those prices have abated, recent economic woes -- layoffs and house foreclosures -- have lengthened lines for food across the country.

"We expect it will get worse before it gets better," said Vicki Escarra, Feeding America chief executive.

The San Francisco Food Bank reflects the challenge. A drop in donations of packaged foods in recent years forced it to build tighter connections to the state's farmers. Though difficult, that's proving more viable than relying on the food industry.

"Mother Nature is pretty solid -- there's always going to be more oranges next year," said Paul Ash, executive director of the San Francisco Food Bank. "That's not true with the manufacturing industry."

On a recent morning, Mr. Ash, stood in his 60,000 square-foot depot pointing to cardboard crates of oranges, acorn squash, carrots, cabbages and watermelons. Fresh fruits and vegetables now account for over half of the food the food bank distributes. Collecting produce and distributing it to pantries means the food bank has to maintain a fleet of seven refrigerated trucks and more volunteers to sort through the fresh food.

This requires more cash. In recent years, the San Francisco Food Bank has successfully coaxed more cash donations, which, thanks to a big one-time gift, reached $10.2 million in the year ended June 30, 2008, from $6.4 million in 2007. It has budgeted for a further increase over the next year, but "even if our plan is successful, we're going to come up short," Mr. Ash said. Demand at the 380 food agencies his organization services keeps rising. Donations of food from retailers to the San Francisco Food Bank have already dropped 20% in the past year.

Several corporations are injecting more cash, if not food. Wal-Mart is doing both. On Wednesday, it announced a new program that will push more food into the food-bank network by increasing the donations of meat and dairy products that are approaching their "sell by" dates. The food will be available through more than 2,700 Wal-Mart Supercenters and nearly 600 Sam's Clubs, and distributed by Feeding America banks. The Wal-Mart Foundation also donated $2.5 million in cash to help food banks improve warehouse capacity and purchase refrigerated trucks to transport the food.

The philanthropic arm of Wells Fargo is expected to announce that it will double its donations, to $100,000, to 16 food banks in the San Francisco area, say officials at the Wells Fargo Foundation. Nationally, the bank has donated $1.2 million to food programs this year, up from $1 million last year, they said. The money will largely go towards buying food.

The Ford Motor Company Fund and Community Services is shifting its donations to meet basic needs like food. Its giving to hunger projects is up 40% from a year ago, particularly to food-distribution agencies in southern Michigan serving a population hit hard by the auto industry's woes.

Ford, Newman's Own and Kraft all recently donated funds for trucks, including 25 refrigerated "mobile food pantries" that Kraft will provide over the next three years to Feeding America. "Seeing the larger numbers of people dependent on the food-banking system, we felt this would be one of the toughest years ever for feeding the hungry," says Amina Dickerson, Kraft's senior director for corporate community involvement.

The flow of new money is a welcome relief for some organizations such as the Open Heart Kitchen, a soup kitchen in Livermore, Calif., which nearly closed in October when its usual donations, including cash and food from individuals, businesses and civic organizations, "completely dried up," said Nancy Richardson, president of the nonprofit's board. The soup kitchen ran down its cash reserves until it was able to scrape up funding through public appeals in the local media.

But that money and much of the recent largesse could prove to be little more than a stopgap measure for other food organizations. In recent months, rising costs and an array of economic blows forced food banks and pantries to shut down, some for days, others permanently, in Seattle, Alabama, Missouri and other states.

This comes as Feeding America says demand at food banks is up about 25% across the country over a year ago, including a surge in first-time clients. More than one-third of those Feeding America serves live in a household where at least one person is employed; about a third of its clients are children, 10% elderly and only about 12% are homeless.

In San Diego in September, more than 4,000 people -- double the expectations -- flocked to the Word of Life Worship Center for food from the Feeding America-San Diego Food Bank, forming a line that snaked through the neighborhood.

"The best-case scenario is we don't miss a beat," says Vince Matulionis, a director at the United Way of King County, which recently set up a $200,000 emergency fund for food banks in the Seattle area. "The worst case is that you'll have strong agencies that have been in the community for a long time that are not able to continue doing business."

Write to Robert A. Guth at rob.guth@wsj.com and Roger Thurow atroger.thurow@wsj.com