Valley foreclosure rates stay relatively low

Foreclosures have remained low throughout the Northern San Joaquin Valley this year. But low is a relative term.

Another 596 Stanislaus County homes were lost to foreclosure during July, August and September. That brings the county's total to nearly 28,000 since the mortgage crisis began in mid-2006, according to property records gathered by DataQuick.

At the peak of the foreclosure mess in 2008, lenders repossessed more than 2,800 Stanislaus County homes in just three months. Foreclosures hit their lowest point — 533 — this April, May and June.

Merced County did better this quarter, with only 221 homes foreclosed there this July, August and September. That was the fewest since early 2007.

During one three-month period in 2008, nearly 1,640 Merced County homes were repossessed. Since the crisis began, nearly 15,000 Merced homes have been lost to foreclosure.

San Joaquin County had 773 homes taken back by lenders last quarter, pushing its six-year total above 37,000.

Notices of default — the first step in the foreclosure process — also continue to decline throughout the Northern San Joaquin Valley and California as a whole.

On average, homes foreclosed on last quarter took nearly eight months to wind their way through the formal foreclosure process.

"A foreclosure happens when a homeowner owes more on the property than the property's worth. Otherwise it could be sold and the mortgage paid off. So foreclosures go up when home values go down. Prices in most areas today are up significantly from their low point in early 2009," said John Walsh, DataQuick president.

Walsh said that during the past year "we've seen short sales overtake the foreclosure process as the procedure of choice to deal with homeowner distress. That may change after New Year's because the temporary 'debt forgiveness' feature in the tax code is set to expire as part of the so-called 'fiscal cliff.' "

Short sales — transactions where the sale price was below what was owed on the property — accounted for about 26 percent of California home sales last quarter.

Foreclosure resales accounted for 20 percent of all California resale activity last quarter.

While 1.48 million of California's roughly 8.71 million houses and condos have been involved in a foreclosure proceeding the past five years, only 847,067 have gone through the whole foreclosure process. About 80,000 of those homes were in the Northern San Joaquin Valley.

Bee staff writer J.N. Sbranti can be reached at jnsbranti@modbee.com or (209) 578-2196.