THE TOTAL NUMBER OF FORECLOSURES IN SEPTEMBER 2008 HAS BEEN CORRECTED.
LAKE COUNTY – As the economy has continued to struggle, foreclosure rates across the nation and the state have risen and, at the same time, the number of homes in peril in Lake County has grown.
RealtyTrac's last US foreclosure report for the third quarter shows a 3-percent increase in foreclosure activity over the second quarter of 2008.
Overall, foreclosures filings – including default notices, auction sale notices and bank repossessions – have risen by 71 percent over 2007's third quarter, the company reported.
Lake County had 470 properties affected by some kind of foreclosure action in the third quarter, a 658-percent rise over the third quarter of 2007, which gives it a rank of No. 12 among the state's 58 counties for most foreclosures per capita, RealtyTrac reported.
Nationwide, in September, foreclosures dropped by 12 percent from August, but were still up 21 percent over September 2007.
Lake County's foreclosures in September numbered 253 – or one for every 136 households – which was 14 percent above its August rate, and a stunning 3,514-percent above September of 2007, when only seven county properties were in some phase of foreclosure, according to RealtyTrac statistics.
The company reported that one in every 475 U.S. housing units received a foreclosure filing in September.
"Much of the 12 percent decrease in September can be attributed to changes in state laws that have at least temporarily slowed down the pace at which lenders are moving forward with foreclosures," said James J. Saccacio, chief executive officer of RealtyTrac.
He noted that SB 1137 in California took effect in early September and requires lenders to make contact with borrowers at least 30 days before filing a Notice of Default.
As a result, in September California's Notices of Default dropped 51 percent from the previous month, which significantly impacted national numbers because California accounts for close to one-third of the nation's foreclosure activity each month.
In the third quarter, there were foreclosure filings reported on 765,558 U.S. Properties. Nevada continued to lead the nation in the most foreclosures, followed by Florida, Arizona and California, which is now in fourth place for the quarter.
Foreclosure filings were reported on 69,548 California properties in September, a 32-percent decrease from the previous month but still up 36 percent from September 2007, according to RealtyTrac. One in every 189 housing units in California received a foreclosure filing during September.
California alone accounted for more than 27 percent of the nation's foreclosure activity, with 210,845 properties receiving a foreclosure filing during the third quarter – up 4 percent from the previous quarter and up more than 122 percent from the third quarter of 2007, RealtyTrac's report noted.
The state also accounted for six of the top 10 US metro areas for foreclosures, with Stockton at No. 1, Riverside-San Bernardino at No. 3, Bakersfield at No. 4, Sacramento at No. 7, Fresno at No. 9 and Oakland at No. 10.
Foreclosures have continued to hit record levels all year long, according to RealtyTrac and to DataQuick Information Services, another company that reports on foreclosure activity.
In quarters one and two of 2008, DataQuick said most of the at-risk mortgages – which Marshall Prentice, DataQuick's president, called “loans-gone-wild” activity – originated in 2005 and 2006. The concern, he added, was that if the economy went into recession the problems might spread beyond the “dicey” mortgage categories and into mainstream home loans.
Andrew LePage, a DataQuick spokesman, said foreclosures aren't showing any sign of slowing down.
What analysts are looking for, said LePage, is the sign that notices of default, the first step in the foreclosure process, have peaked.
Lake County numbers rise
In Lake County, foreclosure filings have grown over the past year, according to data provided by RealtyTrack to Lake County News.
In 2007, total foreclosure filings reached 105 in the first quarter, 72 in the second, 62 in the third and 358 in the fourth, RealtyTrac reported.
While 2007 set records for foreclosures, 2008 broke those records by leaps and bounds.
For 2008, first quarter filings totaled 318 and 411 in the second quarter, rising up to 470 in the third quarter.
Doug Wacker, the county assessor, said his office has been reassessing the value of thousands of homes due to the market changes and foreclosures. He also tracks foreclosures, and notes that the Hidden Valley Lake area is one of the worst hit in the county.
Lake County's state and federal lawmakers are offering information to help local homeowners.
Sen. Patricia Wiggin's Web site offers homeowners assistance at http://dist02.casen.govoffice.com/; click on “Home mortgage assistance.”
Wiggins also co-authored SB 1055 with Sen. Michael Machado, which Gov. Arnold Schwarzenegger signed in September. SB 1055 offers state income tax relief to borrowers whose mortgage debt has been forgiven by their lender.
Congressman Mike Thompson also offers information about legislative relief at his Web site, http://mikethompson.house.gov/PRArticle.aspx?NewsID=259.
The House of Representatives in July passed the American Housing Rescue and Foreclosure Prevention Act, which established the HOPE for Homeowners Program, Thompson's office reported.
The program will help 400,000 families keep their homes by allowing borrowers in danger of losing their homes to refinance into a government backed, fixed-rate mortgage that is insured by the Federal Housing Administration.
Information on the program can be found at www.hud.gov/hopeforhomeowners/consumerfactsheet.cfm; those who need assistance on mortgage or related housing issues, can visit the Hope for Homeowners Web page at www.hud.gov/hopeforhomeowners/index.cfm.
The California Bar Foundation also has a Web site offering information for people trying to avoid foreclosure which is available in both English and Spanish at www.foreclosureinfoca.org/.
State seeks to help homeowners
Gov. Schwarzenegger announced last week his plans to call a special session to work on both immediate foreclosure relief and long-term mortgage reform in order to stabilize the state's teetering economy.
“The single most powerful action our state can take to shore up its economy is to help Californians stay in their homes – and I am presenting a plan to do just that,” Schwarzenegger said. “Curtailing foreclosures will stop the downward spiral of home prices, free up needed cash for homeowners, help save jobs and make an immediate positive impact on our economy.”
Schwarzenegger's proposals include:
A 90-day stay of the foreclosure processes for each owner-occupied home subject to a first mortgage on which a notice of default has been filed;
A “safe harbor” under which lenders will be able to exempt themselves from the 90-day stay procedure altogether if they provide evidence to the state official that the lenders have an aggressive modification program in place to keep borrowers in their homes;
A loan modification model to make loans more sustainable for homeowners.
Looking forward, in order to prevent future mortgage meltdowns, the governor is proposing that the Department of Real Estate and Department of Corporations be able to enforce federal laws and regulations such as the Truth in Lending Act and others, and discipline real estate licensees who violate those laws and regulations.
He also proposes to reform lending practices and licensing requirements and standards for loan originators, require pre-counseling interviews for borrowers entering into risky “non-traditional” mortgages, and urging the federal government to require loan originators to retain a portion of the loan risk to encourage sound underwriting of loans.
During this year's legislative session, Schwarzenegger signed into law several bills from the state Legislature that seek to give relief to homeowners facing financial difficulties. For more on those bills
E-mail Elizabeth Larson at firstname.lastname@example.org.