bbailey@mercurynews.comPosted: 01/18/2011 06:49:57 PM PSTUpdated: 01/19/2011 10:07:30 AM PST
Lenders issued fewer default notices to homeowners in Santa Clara and San Mateo counties last year, marking the first year-to-year decline since the foreclosure crisis erupted in 2007, according to a report issued Tuesday by a private tracking service.
But in a sign that the housing market will remain troubled for years to come, experts cautioned that banks are still working their way through piles of troubled loans, after putting some actions on hold last fall amid disclosures of sloppy record-keeping and slipshod procedures.
The number of homes actually sold in foreclosure also declined in 2010, for the second year in a row, in Santa Clara County and statewide, according to the report from ForeclosureRadar. But the numbers are still far above 2007 levels. In San Mateo County, the number of foreclosures increased last year.
"The delinquency numbers are still high, and that's still fundamentally a problem," said Sean O'Toole, CEO of the Discovery Bay-based tracking service. "The only thing a slowdown in foreclosures is likely to get us is a longer period of time before these foreclosures are resolved."
Robert Kleinhenz, an economist with the California Association of Realtors, agreed. "It's still going to take some time for us to work through this," he said.
The number of Santa Clara County borrowers receiving default notices, the first step in the foreclosure process, fell by more than a third last year, from 15,904 in 2009 to
10,052 in 2010. The number in San Mateo County dropped almost 25 percent, from 5,122 in 2009 to 3,892 in 2010. Statewide, the total also dropped by a third, to 338,999 in 2010. Second-half slumpBut those numbers are still higher than in 2007, when lenders issued 6,513 default notices in Santa Clara County, 2,183 in San Mateo County and 280,095 statewide.The number of homes actually sold in foreclosure fell 12 percent in Santa Clara County, from 5,021 in 2009 to 4,399 in 2010. Foreclosure sales fell 6 percent statewide, to 189,810 in 2010. But the number rose 13 percent in San Mateo County, from 1,448 in 2009 to 1,642 last year.
By contrast, there were 1,700 foreclosure sales in Santa Clara County in 2007. There were 576 foreclosures in San Mateo County that year and 96,901 statewide.
The increase in foreclosures in relatively affluent San Mateo County could reflect a broader trend in which wealthier regions are feeling the effects of the mortgage crisis later, O'Toole said. Those areas may not have had as many residents who received loans for which they clearly did not qualify, he added, but residents may now be losing homes after losing their jobs or income as a result of the recession.
In some respects, O'Toole said, the first half of 2010 started out more favorably: Many borrowers who found themselves in default were able to stave off foreclosure by obtaining loan modifications or persuading banks to let them sell their homes for less than what they owed on the loan -- a practice known as short-selling, which can be less harmful to the borrower's credit rating.
Other borrowers had a more difficult time in the second half of the year, O'Toole said, "as the government push for loan modifications waned and short sales slowed with the rest of the housing market." But he also noted that several banks put foreclosure proceedings on hold last fall, as a scandal over questionable lending practices and poor record-keeping forced them to review their files.
"I think we'll probably see an increase" in foreclosures in coming months, as banks renew their efforts to clean up bad loans, O'Toole said. He added that banks are likely to stretch out the process to avoid the financial costs and possible political backlash of forcing through a wave of foreclosures all at once.
Many homeowners are still struggling to obtain loan modifications, said Martin Eichner of Project Sentinel, a nonprofit in Sunnyvale that counsels residents with housing problems.
Stuck in limboIn some cases, Eichner said, banks are issuing default notices and then letting borrowers stay in their homes for longer periods of time. But he added that the residents are often stuck in limbo, unable to resolve their problems while their credit rating plummets.One expert said he viewed the numbers as a sign that the crisis is stabilizing. "While foreclosures are going to be an issue for the next couple years, it's also clear that we're over the hump for all intents and purposes," said Chris Thornberg of Beacon Economics.
But Kleinhenz was less upbeat. While many foreclosures in 2008 and 2009 involved homeowners who almost immediately ran afoul of subprime loans they couldn't afford, he said, another wave of adjustable-rate loans issued during the boom period of 2006 are due to have their interest rates increase in 2011, after five years.
"It's good to see the number of defaults was down in 2010," Kleinhenz said, "but it's going to continue to be a situation that we deal with in 2011."
Mercury News staff writer Pete Carey contributed to this report. Contact Brandon Bailey at 408-920-5022. Print Email Font ResizeReturn to Top
0 komentar:
Posting Komentar