"Ground Zero in the Foreclosure Crisis"

From the Modesto Bee:

The same day Holly Olmstead packed up the house she no longer can afford here, the City Council took up the troublesome question Tuesday of what to do about homes that have been lost to banks and are now deteriorating.

The Northern San Joaquin Valley is ground zero in the foreclosure crisis: San Joaquin County ranks first in the nation, followed by Merced County in second place and Stanislaus County in fourth.

The homes are left vacant by the bank. Their lawns go yellow. Their swimming pools turn dark. And sometimes, vagrants move in. The homes sometimes become not only a blight and drain on home values, but also a danger.

"Whatever we do, we need to do it soon," Councilman Vince Hernandez said during a council discussion about possible elements for a law to upkeep the homes. "The market is not going to change. It's going to be this way for a number of months, and we have to think about the city's law-abiding citizens who still need to feel safe in their neighborhood."

The council reviewed what might be the most extreme solution offered: fines of as much as $1,000 per day, or as much as $100,000 per house, for failing to maintain landscaping and to shutter a home properly. The council added another element -- allowing police to secure a home.
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Olmstead teared up Tuesday at the possibility of losing her house to the bank. She said she had to stop watering her front lawn when she couldn't pay the bills. She lost her job shortly before escrow closed in May 2005 on a two-story, five bedroom home on Tannehill Drive, a fact she said her lender knew, but still told her she would be able to refinance in two years with money to spare.

"I'm devastated," Olmstead, 44, said. "By the time I tried to refinance, (the lender) said I didn't qualify." She put the house on the market a year and a half ago, but it didn't sell despite enlisting the help of two real estate companies. She has dropped the price from $650,000 to $515,000. If she doesn't find a buyer by Sunday, the home goes into foreclosure, she said.

From MarketWatch:

I spent some time with an industry expert in one of the most distressed areas of northern California -- the Stockton metropolitan area, which currently sports the highest foreclosure rate in the nation.
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The Stockton metro area has had more than 8,000 foreclosures so far this year, one for every 27 households in the area, according to data from RealtyTrac. [Clay] Edwards [an area mortgage consultant] says some 80% of the listed homes in the area are in some kind of financial distress, although he points out that the number of listings is fairly modest compared with the total number of homes in the area.

Closer to Mountain House, the commuter community of Tracy, part of the official Stockton metro area, has some 1,000 listings out of 25,000 homes, with 45% of those in a "distress" situation. Are a lot of Mountain House residents "upside down," meaning they owe more on their mortgage than their home is worth? "You bet," says Edwards.
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All I can say is, this market bears close watching.

From Tuscaloosa News:

Tracy, is the gateway to the San Joaquin Valley, a little town just on the other side of the mountain pass that separates, er used to separate, the greater San Francisco Bay area from the humble countryside. I worked there during the peak of that town being sold as a bedroom community for San Francisco and Silicon Valley, despite those places being more than 60 miles away and hours sitting in traffic.
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Thing is, out there folks took the bait. Extreme commuting and sleeping in a town you have no connections to made sense during the days of easy mortgages, low interest rates and sky-high housing costs. By the time I left there, the median home price in Tracy, the little country town more than an hour away from San Francisco, was up to $500,000.

From the Modesto Bee:

Forged signatures. Fake documents. Phony figures. Lies. Lies. Lies.

That's what leads to real estate fraud, and housing industry professionals must beware of such crimes or they can be criminally prosecuted. That's the message Marlisa Ferreira emphasized Tuesday in a talk to a group of Latino real estate professionals. Ferreira prosecutes real estate fraud cases for Stanislaus County, and she's spreading the word that everyone involved in scams can be held criminally liable.

From predatory lending practices that rip off naive buyers to lie-filled loan applications that deceive lenders, Ferreira wants real estate agents, mortgage brokers and escrow officers who witness such fraud to blow the whistle on their colleagues. "I know you all see it. I know you do. So report it. I don't care if it's a friend of yours who's doing it," Ferreira told members of the Central Valley chapter of the National Association of Hispanic Real Estate Professionals.
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There's plenty of blame to go around in real estate fraud and the current home foreclosure crisis, said Aly Vizcarra, a marketing executive with Chicago Title who is president of the real estate professional group. "Realtors, title and escrow officers, home inspectors and lenders, we all played a hand in this," Vizcarra said.

When the housing market was booming, he said, many home buyers got into bad loans without anyone warning them off. "It was a lot easier when the market was hot to just look the other way and accommodate these (contract) signings," he said.

Vizcarra said his organization is committed to helping more Latinos become homeowners, but buying a home isn't any good if they can't afford the mortgage. "We've got to learn a lesson from this," Vizcarra said.

Also from the Modesto Bee:

Northern San Joaquin Valley incomes fell further behind those elsewhere in California and the United States in 2006, new Census Bureau statistics show. While median family incomes rose about 5 percent in the rest of the state and nation last year, earnings were stagnant in the valley.
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Living is tough when you earn so little. Just ask Henry and Sussana Ontiveros of Modesto, who work full time and together earn about $55,000 a year. "We moved out here from San Francisco (in 1991) to raise our children. We struggled to find good jobs. Now we're making more than we've ever made in our lives, but we're still penny-pinching," said Sussana Ontiveros, 46.

She and her husband, who have seven children, bought their first home in 2003. They were thrilled with their purchase until last month when the interest rate on their adjustable mortgage soared to nearly 9 percent. "When it hit us, it literally brought tears to our eyes," said Henry Ontiveros, 54.

From The Union:

A good time to buy

While declining home prices leave a bitter taste in the mouths of sellers trying to recoup profits on investment properties, the housing slump offers Nevada County's working class a chance to set down permanent roots in their community..."Now buyers are king," said Teresa Poston, a broker with 22 years in the real estate field.
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Teachers and peace officers buying homes now will have to think of their real estate purchases as long-term investments, Poston said. Gone are the days of quick appreciation when investors flipped homes in a matter of months. Instead, buyers must use patience, because they probably won't see significant returns for five to ten years, Poston said.