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Stockton, Calif., Worst Off In 3rd Quarter Look At 100 Metropolitan Areas
Homeowners across the U.S. are increasingly having trouble making their mortgage payments on time, but borrowers in metro areas of California, Florida and other once-booming housing markets are accounting for the biggest spikes in foreclosure filings, according to a mortgage research company. 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.
CBS News
Home Foreclosure Rates Spiking
Stockton, Calif., Worst Off In 3rd Quarter Look At 100 Metropolitan Areas
LOS ANGELES, Calif., Nov. 14, 2007 See Video Report
http://www.cbsnews.com/sections/i_video/main500251.shtml?id=3503535n
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.
CBS/AP) Homeowners across the U.S. are increasingly having trouble making their mortgage payments on time, but borrowers in metro areas of California, Florida and other once-booming housing markets are accounting for the biggest spikes in foreclosure filings, according to a mortgage research company.
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.â€
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."
http://www.cbsnews.com/stories/2007/11/14/business/main3499260.shtml
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