Foreclosure forecast grim

[Ex-SD]

Recent hiccups in prices are not a sign of recovery
By Emmet Pierce
UNION-TRIBUNE STAFF WRITER

May 22, 2008

Nearly 50 San Diego County dwellings per day were lost to foreclosure in April, as the tally of mortgage failures rose 169 percent above last year, DataQuick Information Systems reported yesterday.

Buckling under the weight of risky adjustable-rate loans, many borrowers are giving up on ever bringing their debt current.

Most of the prospects they’ve seen need extensive repairs.
“Some of the people have lost their jobs and they can’t afford their payments, but a lot of them just don’t want the home anymore,” said Linda Ring, a real estate agent who specializes in foreclosures. “They don’t want to ride out the storm.”

April was the county’s 37th consecutive month of year-over-year increases in foreclosures and notices of default, the start of the foreclosure process, the DataQuick research firm reported. There were 1,413 residential foreclosures countywide, a 35 percent increase from March but a rise of nearly 170 percent over April 2007.

April notices of default reached 3,297, an increase of nearly 14 percent from March and a rise of 145 percent from a year ago.

The surge in loan failures underscored that it’s too soon to expect an end to the region’s housing problems, despite recent upticks in home sales and prices. DataQuick previously reported that the county’s median home price rose $5,000 in April to $400,000 after falling for nine months in a row.

Still, the foreclosure report came as no surprise to Gabe del Rio, president of the nonprofit Housing Opportunities Collaborative.

“Month over month, we continue to see an increase in callers for foreclosure prevention counseling,” he said. “We anticipate that this will continue through the next six to 12 months.”

Rick Sharga, vice president of marketing for the research firm RealtyTrac, says the situation will get worse before it improves.

“We still have extremely high numbers of subprime adjustable-rate loans resetting,” Sharga said. “Unless something extraordinary happens, we’ll see a higher level of properties going into foreclosures in the third and fourth quarters.”

All of the county’s communities have been affected, but not equally, DataQuick analyst Andrew LePage said.

“Foreclosures continue to be mainly a problem for places in South County, East County and the inland north, but the whole region pays a price when foreclosures keep marching up,” he said.

On the national scene, RealtyTrac has reported that foreclosure filings – default notices, auction sale notices and bank repossessions – were recorded for 243,353 properties nationwide during April, a 4 percent increase from the previous month and an increase of nearly 65 percent from April 2007.

April was the highest monthly total RealtyTrac has recorded since it began issuing its report in January 2005. While only about 2 percent of households nationwide are in foreclosure, they put downward pressure on overall home values. Areas of California, Florida, Nevada and Arizona continue to be especially hard hit.

Consumer advocates say the solution is for lenders to do more loan modifications with homeowners who have fallen behind in their mortgage payments. But loan servicing companies have been slow to respond to requests from distressed borrowers, del Rio said.

“It is an uphill battle,” he said. “It requires a lot of negotiating and convincing the servicer they will lose more if they don’t do this.”

Dustin Hobbs, spokesman for the California Mortgage Bankers Association, said lenders want to avoid foreclosure as badly as borrowers.

“Lenders are working” to do loan modifications, he said. “Certainly there is no silver bullet (but) there is hope out there. Homeowners should stick with it. Individual lenders are certainly willing to keep people in homes. It’s in everybody’s interest.”

The good news about increased foreclosures is that they are restoring a degree of affordability, said Alexis McGee, president of the Foreclosures.com investment advisory firm. Even so, homeownership remains unattainable for many.

Serafina Jahries has been searching unsuccessfully for a foreclosure home for six months. The 38-year-old stay-at-home mom said she and her husband Chris are renting a home in Encinitas and shopping for bargains among foreclosure homes.

The couple owned a townhome in nearby Santaluz, but sold it near the peak of the recent housing boom. Their goal was to wait until prices dropped, then invest their $100,000 profit in a house.

The problem is they can’t find North County foreclosure home in their $400,000 price range that doesn’t need extensive repairs, Jahries said. In the meantime, she feels like she is wasting the $2,300 per month she is spending to rent a single-family home.

“Here we are just throwing our money away,” she said.

Jahries acknowledged that she could increase her chances of finding a home by broadening her search to other parts of the county, “but we would be buying someplace that we know nothing about.”

While bargains exist among foreclosures, buyers sometimes have unrealistic expectations, said real estate agent Ray Brown, co-author of the “Home Buying for Dummies” primer. Prices are down, but lenders aren’t giving homes away. If consumers can’t find a foreclosure property in their price range, they’re either looking in the wrong neighborhood or they aren’t willing to pay what the market demands, he said.

The rise in April foreclosures reported by DataQuick occurred despite an increase in sales and a rise in home prices. The market rebounded with sales up 33.3 percent from March and the median price hitting $400,000.

While the market is destined to improve, there is no quick fix, said University of San Diego economist Alan Gin. Factors contributing to the real estate slump are higher prices for food and gasoline and “the fact that job growth is not strong” in the San Diego region, he said.

Another problem is tightening credit standards.

“We’ve lot a lot of jobs in real estate-related areas,” Gin said. “But the big problem is mortgages resetting to higher interest levels and people not being able to refinance.”

[Ex-SD]

I think this answers the ever-lingering question; “Are we at the bottom yet?”

And I quote from the article:
“The surge in loan failures underscored that it’s too soon to expect an end to the region’s housing problems, despite recent upticks in home sales and prices. DataQuick previously reported that the county’s median home price rose $5,000 in April to $400,000 after falling for nine months in a row.”

[Ex-SD]

I think this answers the ever-lingering question; “Are we at the bottom yet?”

And I quote from the article:
“The surge in loan failures underscored that it’s too soon to expect an end to the region’s housing problems, despite recent upticks in home sales and prices. DataQuick previously reported that the county’s median home price rose $5,000 in April to $400,000 after falling for nine months in a row.”

[Ex-SD]

I think this answers the ever-lingering question; “Are we at the bottom yet?”

And I quote from the article:
“The surge in loan failures underscored that it’s too soon to expect an end to the region’s housing problems, despite recent upticks in home sales and prices. DataQuick previously reported that the county’s median home price rose $5,000 in April to $400,000 after falling for nine months in a row.”

[Ex-SD]

I think this answers the ever-lingering question; “Are we at the bottom yet?”

And I quote from the article:
“The surge in loan failures underscored that it’s too soon to expect an end to the region’s housing problems, despite recent upticks in home sales and prices. DataQuick previously reported that the county’s median home price rose $5,000 in April to $400,000 after falling for nine months in a row.”

[Ex-SD]

I think this answers the ever-lingering question; “Are we at the bottom yet?”

And I quote from the article:
“The surge in loan failures underscored that it’s too soon to expect an end to the region’s housing problems, despite recent upticks in home sales and prices. DataQuick previously reported that the county’s median home price rose $5,000 in April to $400,000 after falling for nine months in a row.”

[equalizer]

Just amazing. After selling their place at bubble prices to likely first time home buyers (who could have been disabled single mom veteran) people still feel that they are throwing their money away on rent. Thats why, like the Donald, we Piggs pledge to never sell so we don’t end up throwing our money away. Why rent when you can end up in better situation like the US Congresswoman?

[equalizer]

Just amazing. After selling their place at bubble prices to likely first time home buyers (who could have been disabled single mom veteran) people still feel that they are throwing their money away on rent. Thats why, like the Donald, we Piggs pledge to never sell so we don’t end up throwing our money away. Why rent when you can end up in better situation like the US Congresswoman?

[equalizer]

Just amazing. After selling their place at bubble prices to likely first time home buyers (who could have been disabled single mom veteran) people still feel that they are throwing their money away on rent. Thats why, like the Donald, we Piggs pledge to never sell so we don’t end up throwing our money away. Why rent when you can end up in better situation like the US Congresswoman?

[equalizer]

Just amazing. After selling their place at bubble prices to likely first time home buyers (who could have been disabled single mom veteran) people still feel that they are throwing their money away on rent. Thats why, like the Donald, we Piggs pledge to never sell so we don’t end up throwing our money away. Why rent when you can end up in better situation like the US Congresswoman?

[equalizer]

Just amazing. After selling their place at bubble prices to likely first time home buyers (who could have been disabled single mom veteran) people still feel that they are throwing their money away on rent. Thats why, like the Donald, we Piggs pledge to never sell so we don’t end up throwing our money away. Why rent when you can end up in better situation like the US Congresswoman?

[Author]

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