Foreclosure Sales Now Represent About 16 Percent of all Home Sales in California

Posted on July 14, 2007. Filed under: Foreclosure Research |

The situtuation may get worse before it gets better. At the vast majority of foreclosure auctions, no one bids against the lender to buy the property. So the lender gets the house for the price of its outstanding debt, which may be more than the home is worth.

Lenders were the lone bidder at 94 percent of the auctions statewide in June, according to ForeclosureRadar’s statistics.

According to RealtyTrac, San Joaquin County, CA had the highest rate of homes in the process of being foreclosed, 1 in 103.

Merced County ranked second worst, with 1 in 121 homes in the foreclosure process.

And Stanislaus County ranked fourth worst, with 1 in 131 homes.

For California as a whole, 1 in 315 homes was in the foreclosure process.

The nationwide rate is 1 in 704 homes.

Traditionally, most homeowners who receive notices of default have been able to refinance their mortgages, catch up on payments or sell their houses before lenders force an auction.

But as home prices fall, mortgage lending requirements tighten and loan interest rates rise, avoiding foreclosure has become more difficult.

“Lenders are building a significant inventory (of repossessed homes),” O’Toole said. “Since Jan. 1, 2007, a total of 29,696 California properties have been returned to the lender for an astonishing total loan value of $12 billion. This is unprecedented.”

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