LOS ANGELES, Calif., Nov. 14, 2007
Home Foreclosure Rates Spiking
Stockton, Calif., Worst Off In 3rd Quarter Look At 100 Metropolitan Areas
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Play CBS Video Video Mortgage Crisis Hurts Retirees Levitt and Sons, the company that invented the American suburb, is crumbling and many of their clients have invested their retirement funds into homes that are not finished. Kelly Cobiella reports.
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A home under foreclosure in Stockton, Calif., Nov. 11, 2007 . (AP/Stockton Record)
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An analysis of foreclosure activity in the nation's largest 100 metropolitan areas during the three months ended Sept. 30 shows seven cities in California and five each in Florida and Ohio were among the top 25 metro areas with the highest foreclosure rates, according to the study being released Wednesday by RealtyTrac Inc.
The Irvine-based company calculates its foreclosure rate ranking by comparing the number of households in a metro area with the number of foreclosure filings, which include notices of default, auction sale notices or bank repossessions.
Stockton, about 83 miles east of San Francisco, had the highest foreclosure rate in the third quarter among the top 100 metro areas, with one foreclosure filing for every 31 households, RealtyTrac said.
Detroit was second, with one foreclosure filing for every 33 households. The Riverside-San Bernardino metro area, located about 60 miles east of Los Angeles, was third, with one filing for every 43 households.
Riverside-San Bernardino also accounted for the most foreclosure filings in the U.S. during the quarter, RealtyTrac said.
The housing market slump has made it harder for financially strapped homebuyers to sell their homes and avoid missing payments or losing their homes in foreclosure. Increasingly, many borrowers who took out adjustable-rate mortgages and other loans that potentially adjust to higher monthly payments after an initial period are also finding they can't afford their payments.
Once-booming areas, such as California's Central Valley, where Stockton is located, and the neighboring counties that are home to Riverside and San Bernardino, are also mired now with a glut of new and resale homes.
"What happens there is you have your basic economic imbalance between supply and demand," said Rick Sharga, vice president of marketing for RealtyTrac. "It exacerbates the problem for people who are on the verge of default."
Stockton had 7,116 foreclosure filings on 4,409 properties during the quarter, an increase of more than 465 percent from the same quarter a year ago, the company said.
The Detroit metro area, which includes Livonia and Dearborn, reported 25,708 filings on 16,079 homes, up more than 93 percent from the same quarter last year. It had the third-highest number of filings during the quarter.
Riverside-San Bernardino, meanwhile, had 31,661 filings on 20,664 properties, a jump of more than 267 percent from the year-ago quarter.
Fort Lauderdale, Fla., was ranked fourth, followed by the Las Vegas-Paradise metro area.
In Fort Lauderdale, one in every 48 households was in foreclosure, up 127 percent, reports CBS News correspondent Kelly Cobiella.
The foreclosure spikes are even affecting Levitt and Sons, the company that founded Levittown and helped popularize the American suburb. The company is facing bankruptcy and blames its troubles on a housing glut, the mortgage crisis and skittish buyers.
Retirees Angelo and Paula Palermo were supposed to be closing on their Levitt home in Port St. Lucie, Fla., this winter, reports Cobiella. Instead they're living in a one bedroom apartment, waiting to see if their builder can survive.
"This was our last move, I swear,” said Angelo Palermo. “I said to my wife, this is where we will die.”
But the Palermo's development and more than 30 others across the southeast are on hold, and some 600 customers, many of them retirees, with $18 million in deposits are in limbo, reports Cobiella.
The California metro areas of Sacramento, Bakersfield and Oakland were also among the top 10 metro areas with the highest foreclosure rates, garnering the sixth, ninth and 10th spots, respectively.
A metro area in Ohio composed of Cleveland, Lorain, Elyria and Mentor was ranked seventh. Miami was ranked eighth.
Los Angeles had the second-highest number of foreclosure filings during the quarter with 29,501 on 18,043 homes. The city's foreclosure rate was one filing for every 113 households, or 26th overall.
Some metro areas, including Baton Rouge, La., McCallen-Edinburg-Pharr, Texas, and Greenville, S.C., saw foreclosure filings drop during the quarter.
Borrowers in Detroit and other metro areas in the Midwest that have been hard-hit by job losses generally were receiving late-stage foreclosure filings, such as notices of auction or bank repossession, Sharga said.
"That just speaks to the underlying weakness in those areas," he said.
Dave Webb, co-owner of Hudson & Marshall, a foreclosure auction firm based in Dallas, said most of the properties being auctioned by his firm in inland areas of California are investment properties that ended up being repossessed by lenders after the market tanked.
"What I'm selling this week - 700 homes in the Stockton-Oakland area - these properties were probably foreclosed a good year-and-a-half ago," Webb said.
The properties that end up in foreclosure now, however, will likely be homes bought by first-time buyers and others with adjustable rate mortgages due to reset to higher monthly payments, he said.
"You'll see when we come back late next year," Webb said. "It will be mostly owner-occupied homes."
© MMVII, CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.
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See all 83 CommentsI am in the process of buying a house now, I''m 31, been renting and saving for about 6 years to be able to afford 20% down, and my loan is fixed and less than my annual income. Easy rules to live by, but only if you actually want to live within your means.
And to all the "speculators" and "flippers" that got hammered in this.... remember that house or "investment" as you called it, is like any other investment, stocks go up, stocks go down, so quit crying and take the loss.
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If he is elected President, Ron Paul will work to abolish the Federal Reserve System as well as the IRS, returning our country to the Gold Standard. He believes, as I do, that our current Income Tax System is unconstitutional, because it is a direct tax that is not equally apportioned as The Constitution requires. Whenever taxes are raised by the federal government, it should be done as The Constitution does require--in an indirect way, which is equally apportioned. This system would benefit all of us, creating more individual wealth, and allowing us to make more decisions for ourselves about our lives. As President, Ron Paul will also work to abolish the Federal Reserve, a group of private banks, run by unelected officials, which loans our government unbacked money which they are allowed to essentially print out of thin air, making each dollar in your pocket worth less all the time, and increasing our national debt to these banks. Worse still. Most of our debt is owned by China (25%) and Saudi Arabia who finance our runaway military spending overseas. This is a threat to our nation. We need to bring our troops home from overseas, and use the trillions we would save thereby to reduce our debt, and to re-invigorate our currency. We can use this money to ensure that Social Security and other essential programs will still be solvent in the future. Vote for Ron Paul. He''s published three books on the topic of sound economics. ronpaullibrary.org
Federal Reserve Chairman Ben Bernanke appeared before the Congressional Joint Economic Committee Chairman, Congressman Ron Paul on November 8th, and had to face some tough criticism concerning the fact that the Fed has been increasing the money supply while at the same time refusing to raise the Prime Interest Rate in order to curb inflation and devaluation of the Dollar. Paul accused the Federal Reserve of "robbery," telling Bernanke, "There''s a dollar crisis out there and people''s money is being stolen," Paul said. "People who have saved, they''re being robbed. I mean, if you have a devaluation of the dollar at 10 percent, people have been robbed of 10 percent." Federal Reserve Chairman Ben Bernanke attempted to dispel that notion by explaining, "If somebody has their wealth in dollars and they''re going to buy consumer goods in dollars, then the only effect it has on their buying power is that it makes imported goods more expensive." Paul disagreed, reminding Bernanke, "Yeah, but not if you''re elderly and you have your wealth in CDs. Their cost of living is going-up no matter what your CPI says," adding finally, "Their cost of living is going up, and they''re hurting. And that''s why the people of this country are very upset."
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They don''t call him "Dr. No" for no reason. The Doctor is in! Join us in this 21st Century political revolution at ronpaul2008.com
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What gets me is this, if you owe 150k on your house, someone offers you 147k the banks says no you can''t pay out the remaining balance of 3k and we are going to foreclose, they end up selling it for 125k so now you owe us 25k instead of 3k!! Put that in your pipe and smoke it!
Posted by jankebenz
Then why are gas prices highest in San Diego, considering that gas supplies are uniform over the US? Because the prices are colluded to force the highest price that the market in that area can possibly bear. LA is only two hours north, with a lot more cars, (higher demand) but the gas price is lower. Same for electric power, foodstuffs, and many other essential items.
Collusion is the chief denominator. Notice that gasoline prices track exactly when the crude price rises, but lag far behind any drop in crude prices (I admit it has been a long time since we''ve seen a drop, but check back, its there.)
Posted by brianbwb at 01:52 AM : Nov 15, 2007
No offence, but some upgrading in economics would be in order supply -demand are the chief denominaters in setting market pricing .
Oh that ==is== a nice fantasy, banks with assets tied up in real estate falling in value like a rock. But it will not happen because banks do not want it to happen, and they seem to be calling the shots.
Maybe the banks have me brainwashed but it sounds scary, thinking what could happen to the economy in that scenario. But what is the alternative?
Your analysis of supply and demand has been proven wrong long ago, the control of the supply by artificial, collusionary, and monopolistic practices creates artificial shortages, driving up prices. The average consumer does not influence the price of commodities, the large corporations that control the supply by buying and stockpiling large amounts do.
The theory you posit was taught in fourth grade civics class, while the students only look out the window at the gas pump to see the inaccuracy of such dangerous misinformation
Your analysis of supply and demand has been proven wrong long ago, the control of the supply by artificial,
BAD CREDIT?
Bullshiite!, the number 1 reason for the housing problem is greed. Homes are all over valued by 100% in some cases 150%.
Now, everyone who purchased a overvalued home has seen it''s value start to fall, and I mean START to fall. Yet they are stuck with high cost mortgages. Greedy real estate people, greedy banks, and mortgage companies all scewed the American public.
Let all the overpriced homes go into forclosure, let the banks get stuck with tens of thousands of overpriced homes. Sit back a year or two, and the price of homes will really start to fall back inline with what they should be.
Then buy your $250,000.00 for $250,000.00 not the $450,000 to $600,000.00 these crooks wanted.
Naah... who would do that? Surely not the people we have running things?
Since such a downturn is not occurring, nor is it predicted to occur, a more accurate description would be "a sharp increase".
"Softening" the truth is the fraternal twin of lying, and it makes me wonder who is the writer of this article trying to protect?
Worse yet, the bad loans get picked up by the government and become a taxpayer expense. But renters do not get the big mortgage interest welfare windfall that homeowners get, so the renter pays more of this tax burden--double (or is that triple) jeopardy.
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