Foreclosures On the Rise in Some Areas of California

Though some major lenders have called for a halt to foreclosures, the number of at-risk homeowners in February rose 30% from last year. Across the country, over 290,000 homeowners were sent default notices last month. This represents a 6% jump from the previous month. Particularly hard-hit are the Western states and Florida, though the dilemma is beginning to be felt in states like Illinois, Idaho, and Oregon. To make matters worse, many experts do not see the problem easing up any time soon.

Many lenders have taken action to help stem the tide of foreclosures. Temporary halt on foreclosures were instituted by mortgage giants Fannie Mae and Freddie Mac as well as major banks Citigroup, Morgan Stanley, Bank of America and JPMorgan Chase. These companies all took action prior to the Obama Administration’s plan to stem the real estate crisis being released last week. In Florida and New York, temporary bans on foreclosures have been lifted, contributing to the rise in foreclosures. Other states are currently pursuing legislation to stem the tide. In Michigan this week the House passed a bill that would grant a 90 day reprieve to homeowners facing foreclosure. The bill now goes to the state’s Senate. As foreclosure numbers keep growing, banks have not listed the properties for sale. There were around 695,000 such home at 2008’s end. Should all these properties be listed, it could cause the housing crisis to persist even longer.

All of this represents a huge challenge for the Obama Administration. The Administration’s plan aims to help more than 8 millon Americans avoid losing their homes. More than 11% of all those paying on a mortgage (almost 5.5 million homeowners) were behind or already facing foreclosure at the end of last year.
That is the biggest number of at-risk homeowners ever. The number is up from 10% in the 3rd quarter and 8% at 2007’s end. A report from RealtyTrac says that almost 75,000 homes were repossessed in February. Foreclosure rates were the highest in the states of California, Arizona, Florida, and Nevada. In Nevada one out of every 70 homes faces a possible foreclosure battle. In Arizona, it’s one out of 147. The other states with top 10 foreclosure rates are Georgia, Michigan, Illinois, Idaho, Ohio and Oregon.

As for metropolitan areas, Las Vegas, with one out of 60 homes facing foreclosure, ranks highest. Second was the Fort Myers-Cape Coral area of Florida. The next six areas with the highest foreclosure rates are all California areas: Stockton, Modesto, Merced, San Bernardino, and Bakersfield. The San Diego real estate market, as well as, the La Jolla real estate market are not seeing as many foreclosures. This has many experts saying that San Diego has already hit bottom.