California Foreclosures Driven by Filings in 9 Metro Areas

by Simon Lindsay on States

The still record pace of California foreclosures in 2009 was largely driven by increased foreclosure activities in nine metro areas in the state.

California had 632,573 or 4.8 percent of its residential properties in default or in foreclosure in 2009, a jump of 21 percent from 2008 and a still staggering increase of 154 percent from 2007.

With nine of its large metropolitan areas occupying the top 20 in foreclosure activity, California posted the fourth-highest rate of foreclosure among states last year.

Merced posted the highest metro foreclosure rate in California, with a rate of 10.1 percent or nearly 8,400 of its residential properties in default or foreclosure. Among all large U.S. metro areas, it ranked third.

The Riverside metro area was next to Merced, with an 8.8 foreclosure rate and 126,376 of its housing units getting foreclosure filings.

Next were Stockton and Modesto, which posted 8.62 and 8.53 in foreclosure rates, respectively. They were fifth and sixth among all U.S. metro areas in foreclosure activity.

In 11th place nationwide was the Vallejo-Fairfield area, which posted a 7.14-percent foreclosure rate and almost 11,000 filings. In 12th place was Bakersfield, with a 7.13-percent rate and more than 19,000 filings.

The Sacramento, Fresno and Salinas metro areas, which ranked 15th, 19th and 20th, respectively, completed the nine areas which pushed California foreclosures into record foreclosure levels in 2009.

In the last quarter of 2009, foreclosures in California slowed compared to the previous quarter as major lenders suspended their filings in compliance with state and federal pressures to modify loans.

The 84,568 pre foreclosures in California in the last quarter marked a drop from the third quarter, but marked a jump from the same period in 2008. The number of houses that were ultimately repossessed by the banks and became foreclosure homes for sale reached 51,060, an increase of more than two percent from the third quarter and a jump of nearly 11 percent from the last quarter of 2008.

According to housing analysts, over two-thirds of homeowners receiving delinquency notices ultimately lost their homes to foreclosure because of their inability to refinance or to modify their mortgages into affordable levels.

The other major foreclosure factor was job loss. In California, the unemployment rate remained high at 12.4 percent in December, higher than the nationwide jobless rate of 10 percent.

In addition, the effects of unemployment have already spread into affluent communities in California. A bigger portion of California foreclosures are now occurring in high-end residential subdivisions.

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