While the number of San Benito County homes entering the foreclosure process continues to inflate over already stunning figures, the area also has shown a hefty hike in bank repossessions after properties fail to sell at public auctions, according to date from Irvine-based RealtyTrack.
During the second quarter of 2008, banks seized 120 foreclosed homes in San Benito County that failed to sell. During that same time last year, there were just three.
In total, the number of homes at some level of foreclosure reached 528 for the second quarter, including 279 notices of default. In that period last year, there were 90 cases of homes entering the foreclosure process, and that had been a near tripling of the figure from 2006, according to RealtyTrack's statistics.
The July numbers, meanwhile, don't show much promise, as 89 property owners entered into foreclosure last month, according to RealtyTrack's most recent report.
A combination of factors has the county and state in the throes of worsening housing problems. As time has passed, the numbers show a dramatic increase in all aspects of foreclosures, and lenders and Realtors are feeling the pinch while looking down the road at possible solutions.
"We were seeing really low REO (bank repossession) numbers a year ago," said Daren Blomquist of RealtyTrack.
People at the time, he said, had more options to sell or refinance.
"If the owner lost the house last year, it often had equity in it and so it was sold to a third-party buyer."
Now, many properties have zero equity so they end up with the foreclosing lender, he said. The "properties with filings" - or the total number - are made up of all filings for a notice of default (NOD), a notice to sell at auction (NTS), or a real estate-owned by lender (REO).
These filings are the three steps in foreclosure, and collectively they were up 53 percent over quarter No. 1 of 2008 and 500 percent over figures from one year ago.
While it is even worse here than many other California counties, it's not just a San Benito County problem. The state as a whole ranks second in terms of the most foreclosures in the country, while San Benito County ranks fifth most foreclosures of the 58 counties statewide.
"Right now, we are not seeing people get any negotiations out of their lenders when they face foreclosures," said Karl Skow, a broker associate with Treehouse Mortgage. "We are hoping to see more leeway for folks after Oct. 1 when the housing bill takes effect."
That housing bill is set to offer a program through the Federal Housing Administration that could present some relief to troubled homeowners.
The program would seek to entice lenders to forgive debt on loans down to 90 percent of the homes appraised value. The FHA would then refinance the loans to make them affordable for the homeowners.
"It may be something lenders take a hard look at," Skow said. "It might cost the lender more to buy, maintain and sell the place than forgiving that loan."
Israel Gonzalez of Beale Properties believes that no one can really tell if the market has hit rock bottom.
"You have all these homes on the market at low prices making buyers salivate," he said. "Meanwhile, a lot of people have lost their homes, and a lot have moved out and just decided to let the bank have it because they have lost $200,000 in equity.
"Then you have all these people whose adjustable rates are going to go way up in the next year," said Gonzalez, noting that some of them would increase from 1 percent to 6.5 percent.
Gonzalez, like everyone involved in the housing issue, can't say for sure whether it'll get any worse.
"I would say we are between the middle and the tail end," he sighed. "No one can say for sure right now."
Jeff Gatlin Jeff Gatlin is a staff writer at The Hollister Free Lance. You can call him at (831) 637-5566 or send him an email.
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