Hollister
– Foreclosure rates continue to soar in San Benito County,
according to numbers released by Irvine-based data firm
RealtyTrac.
Hollister – Foreclosure rates continue to soar in San Benito County, according to numbers released by Irvine-based data firm RealtyTrac.
The county had 90 foreclosure filings during April, May and June of 2007. That’s down from the 103 filings in the first quarter of 2007, but filings have still increased 275 percent compared with the second quarter of 2006.
According to RealtyTrac’s numbers, 170 homes were in some stage of foreclosure during the first half of 2007. That’s nearly one out of every 100 San Benito County homes.
“It’s wiped out a lot of people,” said Al Martinez, executive director of the county’s nonprofit Economic Development Corp.
San Benito County isn’t alone in its foreclosure woes. During the second quarter of 2007, foreclosure rates nearly quadrupled in California and nearly doubled nationwide compared with the same period in 2006.
Karl Skow of Hollister’s Pacific Finance Co. has said many foreclosures are due to problematic home loans secured during the recent housing boom. Those loans started out with low rates scheduled to increase substantially down the line. And when the rates went up, many homeowners couldn’t make the higher payments, and couldn’t sell their houses in the slowing market.
Lenders have tightened their rules and discontinued those “subprime” loans, Skow said Monday, but many mortgages obtained in 2006 won’t reset to their higher rates until 2008 or later.
“There’s still a lot of digesting to be done,” Skow said. “I don’t think we’re out of the woods yet.”
Jack Kirk Jr. of Realty World and Community West said the full effect of the foreclosure crunch “will not be realized until the middle to end of 2009.” He added that foreclosures continue to slow the local real estate market.
“Banks need to get these (foreclosed) homes sold quickly and are willing to sell them at a reduced price to do so,” Kirk said.
Others have said foreclosed homes for sale have contributed to the growing number of houses on the market. Between June 2006 and June 2007, San Benito County’s housing inventory increased from 384 to 491 homes.
Foreclosures and the slow housing market have damaged local real estate and mortgage companies, Martinez said. They’ve also slowed the general economy because foreclosed homeowners whose investments are lost and whose credit ratings have plummeted aren’t going to be spending any money, he said.
The Leadership Conference on Civil Rights, the NAACP, the National Fair Housing Alliance, the National Council of La Raza and the Center for Responsible Lenders have called for a six-month moratorium on subprime home foreclosures, arguing that subprime loans are given disproportionately to minorities, and that the loans account for the majority of new foreclosure filings.
Foreclosures have also hit local affordable housing, with county planners reporting recent foreclosures in the affordable development Riverview Estates. But Dennis Lalor, executive director of South County Housing, said a combination of financial education and affordable payment structures mean South County had seen very few foreclosures.
Lalor added that many South County homes and mortgages are given to people who fall into the “subprime” category.
“Subprime lending and predatory lending are not the same thing,” he said.
Skow said the majority of his clients are now homeowners who want to refinance out of tough loans, rather than buyers looking for a new mortgage. In some cases, Skow said he’s able to help, but in many others, people are stuck.
“It’s really sad because I didn’t put them in those loans,” he said.
