Housing data for region show an ongoing decline

Just when it looked as if Stanislaus County's foreclosure crisis were easing, the number of mortgage default notices spiked last month. Those warnings are the first step in what often is a very long foreclosure process.

In Modesto, for example, there were 70 percent more default notices during August than July. In some parts of town, including west and central Modesto, the number of foreclosure warnings more than doubled last month.

The bad news is much the same throughout the Northern San Joaquin Valley and across most of California, according to ForeclosureRadar statistics.

Residents in Stanislaus, Merced and San Joaquin counties have lost more than 69,600 homes to foreclosure since 2007. Those property owners defaulted on more than $26.3 billion in mortgage debt.

Last month alone, an additional 1,795 homeowners in the three counties were warned they were in default on their mortgages. If something isn't done about those unpaid loans, they, too, will lose their homes.

"Bank of America was responsible for almost all the surge in default filings," said Sean O'Toole, who runs ForeclosureRadar.com. "It could be BofA was playing a little bit of catch-up."

There's a lot of catching up to do for banks, considering how many homeowners have essentially stopped paying their mortgages.

In Stanislaus County, nearly 10.6 percent of mortgages are

90 days or more past due, CoreLogic loan tracking statistics show. Delinquencies are even worse in Merced and San Joaquin counties.

One big reason for that may be that most homeowners with mortgages owe more than their homes are worth. Loans on about 53 percent of residential properties are "underwater" in Stanislaus and San Joaquin counties, and 5 percent of loans are close to going under, according to CoreLogic.

While there are housing woes nationwide, a just-released Brookings Institution analysis shows things are the worst around here. Stanislaus ranked at the very bottom — right below San Joaquin — for how much home prices have declined: 65 percent since 2006.

Median home prices, which peaked at $396,000 during the housing boom, have dropped to about $130,000 in Stanislaus.

If it had more people, Merced County probably would have made that worst-case home price list, but Brookings only rated the nation's 100-largest metropolitan areas.

The Brookings rankings also named Stanislaus worst-of-the-worst for its high unemployment rate, which is 17.5 percent.

Unemployment is what's pushing many homeowners into mortgage default, said Martha Lucey of ClearPoint Credit Counseling Solutions, which offers free foreclosure prevention services in Modesto.

"When people lose their jobs or have a reduction in income (because work hours or wages were cut), it makes it very difficult for them to hold onto their mortgages," Lucey said.

Banks these days try very hard to encourage homeowners to take action to prevent default, Lucey said, but homeowners too often ignore financial problems until it is too late to avoid foreclosure.

"There are programs out there that can help people if they qualify," Lucey said. The sooner homeowners seek assistance, the more options may be available to help them keep their homes or get other acceptable outcomes, she added.

ClearPoint and other nonprofit counseling programs certified by the U.S. Department of Housing and Urban Development offer neutral advice and don't charge homeowners for services. But homeowners must protect themselves from unscrupulous companies that prey on those facing foreclosure.