Counties hit hard by foreclosures

April 23, 2008 10:02:29 AM PDT
New numbers on California foreclosures released Tuesday indicate they're at the highest level in at least 15 years. The number of default notices that went out between January and March is up 39 percent from last year. Most of those loans originated between August 2005 and October 2006 -- the people who bought homes at the peak of the market. Typically, they have fallen about five months behind on their payments.

According to Data Quick, last quarter's loan default numbers were a record in 57 California counties. Los Angeles was the exception. Two of the counties hardest hit with foreclosures are Contra Costa County and here in Santa Clara County where a senor citizen we spoke to, will now lose her home, foreclosed home owner.

"Had I known when we refinanced last year, I would never have gone for something like that," said Carmen Johnson.

Johnson is losing the home she has lived in for the past 35 years to a foreclosure sale.

"I'm 65 years old. I needed a little something to retire on," said Johnson.

She refinanced her home with a sub-prime loan. Her payments recently jumped from $2,500 a month to $3,500 when the loan reset.

"I didn't read the fine print and I wanted the money," said Johnson. "I just took the money without really paying attention."

"You'll hear that story over and over again," said San Jose realtor Sandra Sample.

Sample sees too many clients caught in the crisis. According to Data Quick, foreclosures in the first quarter of this year rose dramatically over a year ago, hitting two Bay Area counties especially hard.

Contra Costa County saw a 139 percent rise in home and condo foreclosures and in Santa Clara County the increase is 190 percent. Data Quick figures show homes and condo sales are down 32 percent in Contra Costa County and 46 percent in Santa Clara County. Both counties had a high number of homes that went into default due to sub prime loans taken out in 2005 and 2006.

Mike Miller is a broker with capital market funding in Danville.

"If you bought two or three years ago and you didn't put any money down and your loan interest rate went up and your property values went down, that's a recipe for disaster," said Miller.

Miller says even though the Federal Reserve lifted the conforming loan rate to just over $729,000, few people are biting because those still carry a high interest rate. Miller says the people who are buying are well qualified buyers.

The 17 condos on West Almaden in San Jose are looking for well qualified buyers. They went on sale last August and only one unit has sold so far. Mike Miller says banks are favoring well qualified buyers who have good jobs, good credit, and a good down payment.


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