California cities lead U.S. in foreclosures

October 23, 2008 6:08:31 PM PDT
The bad news on foreclosures has now gotten worse. Nearly 80,000 California homes have been taken back by banks and other lenders as the state's foreclosure rate soared 228 percent in the past three months over last year.

Housing and banking officials are urging more help so people can keep their homes. Promises of loan modifications to address defaults are not happening fast enough to make a difference.

California holds the dubious distinction of having six of the top 10 cities with the highest foreclosure rates in the country.

  • (1) Stockton
  • (3) Riverside- San Bernardino
  • (4) Bakersfield
  • (7) Sacramento
  • (9) Fresno
  • (10) Oakland
  • (21) San Jose
  • (51) San Francisco

Nationwide, foreclosure rates last month were up 71 percent compared to a year ago.

"2007 was bad enough in the third quarter of last year, and now we're seeing over a 70 percent increase this year. There's something wrong with those numbers in terms of lenders sitting down and modifying loans," said Larry Hynson, a policy analyst and housing counselor at ACORN in Oakland, a community group helping troubled homeowners. His filing cabinet is overflowing with a growing number of cases.

Gelbke Lane in Concord is one of the hardest hit in the Bay Area where Zelma Johnson is one of at least five neighbors on the same block facing foreclosure.

"It's really scary. Not only that, it's the damage that it has caused your credit. It makes you feel very insecure and just like you're worthless," said Johnson.

Mrs. Johnson has already been served an eviction notice. She has hired an attorney to delay the process while she tries to sell the house. She estimates the house is now worth less than half what she paid for it two years ago.

FDIC Chairman Sheila Bair told the Senate Banking Committee in Washington on Thursday that homeowners in trouble need urgent help.

"Everyone agrees, that more needs to be done for homeowners, we need to prevent unnecessary foreclosures and we need to modify loans at a much faster pace. Preventing unnecessary foreclosures will be essential to stabilizing home prices and providing stability to mortgage markets and the overall economy," said Bair.

Housing counselors have noticed more face-to-face meetings between lenders and mortgage holders. A new California law requires that at least 30 days before a notice of default can be filed.


Load Comments