Thursday, Dec. 11, 2008

Valley homeowners still playing catch-up

Local real estate market has yet to find a bottom

Foreclosure filings fell nationwide in November, but they spiked dramatically in the Northern San Joaquin Valley, statistics released today by RealtyTrac show.

Lenders repossessed 1,641 homes last month in Stanislaus, San Joaquin and Merced counties, and they warned 2,727 additional homeowners that foreclosure was imminent if they didn't pay up.

The three counties placed among the five worst in the nation on RealtyTrac's foreclosure rankings. That's been true for nearly every month for the past two years.

What's new, however, is that U.S. foreclosure filings overall dropped 7 percent in November. Unfortunately, the decline isn't because more homeowners have started paying their mortgages on time.

"Recently enacted laws have extended the foreclosure process in some states, along with more aggressive loan modification programs and self-imposed holiday foreclosure moratoriums introduced by some lenders," explained James Saccacio, RealtyTrac's chief executive officer. "There are several indications, however, that this lower activity is simply a temporary lull before another foreclosure storm hits in the coming months."

That's likely in Stanislaus County, judging by the legal filings. Nearly five pages of foreclosure notices were printed Wednesday in The Modesto Bee, most of which notified homeowners when their property would be sold to the highest bidder.

During November, 728 such "notices of trustee sale" were filed in Stanislaus, according to RealtyTrac. That was up from 544 in October. Since trustee sale notices are about a month ahead of auctions, expect foreclosure sales to rise again in December.

Homeowners aren't the only ones who suffer when homes are repossessed.

Last month in Stanislaus, lenders that foreclosed got stuck with more than $197 million worth of unpaid mortgages, according to figures released Wednesday by ForeclosureRadar.

Lenders that renegotiated mortgages rather than foreclose aren't doing so well either.

"More than half of the homeowners (nationwide) who received loan modifications to reduce monthly mortgage payments in the first half of 2008 are already delinquent on their loans again, according to the U.S. Office of Thrift Supervision," RealtyTrac's Saccacio said. "Many of these delinquencies could turn into foreclosures next year."

Bee staff writer J.N. Sbranti can be reached at jsbranti@modbee.com or 578-2196.

For more details on RealtyTrac's report, go to modbee.com