Fresno Foreclosure Homes up Due to Job Loss and Price Fall

by on Foreclosure Crisis

The number of Fresno foreclosure homes and the rate of delinquency stepped up in January this year, based on reports from real estate firms.

Nearly 4 percent of all Fresno County mortgaged homes were foreclosed in January, a substantial increase from 1.5 percent in January 2009. Similarly, more than 13 percent of mortgage borrowers were delinquent by three months or more in January this year, up from around 8 percent in January 2009.

In nearby Merced County, foreclosure activity was even fiercer as 6.6 percent of mortgaged homes were foreclosed in January this year, marking a 4.8-percent jump from January last year. Loan delinquency also soared, with around 19.6 percent in default by more than three months.

Prospective buyers can quickly search foreclosed homes in the San Joaquin Valley, where Fresno and Merced are located, because both foreclosure and delinquency rates were higher than the statewide and nationwide average rates.

The rate of California foreclosures in January was 3.75 percent of all home loans and the pace of default was 11.64 percent. The nationwide foreclosure rate was 3.19 percent and the pace of delinquency was 8.66 percent.

Because of the continued rise in number of low-priced Fresno foreclosure homes, home price levels in the area continued their descent. In a foreclosure auction in Central Fresno in February, the highest bid for a home valued at $382,000 three years ago was $170,000 while a house previously valued at 286,000 got only $82,500 as its highest bid.

According to Richard Green, the real estate department director at the University of Southern California, home prices in Fresno and in many other parts of California have hit levels where they are almost the same as rents and may have hit their bottom levels. However, he contended that they are not likely to rise soon to significantly higher levels.

Green, who spoke at a land use planning event at Fresno State University, also told participants that the number of foreclosed properties will again soar because of the sharp increases in delinquencies, particularly Fannie Mae Loans, and the still rising rates of unemployment. He also mentioned that 30 percent of all Americans with mortgages are underwater.

In addition, the number of distressed borrowers victimized by mortgage and loan modification fraud in the Valley has been rising, worsening the rate of foreclosure activity in the area.

According to Green, Fresno foreclosure homes will rise further in number if unemployed homeowners decide to walk away from their overvalued homes to look for jobs in other states.