"Narratives" Week: #1: Foreclosure rate

"Stanislaus County is further through the process than the rest of California," said Sean O'Toole, whose company ForeclosureRadar tracks homes in mortgage default throughout the state. "We are going to continue to see a general decline in foreclosure activity there."

For the next few days, Badlands is going to examine what are called in the PR industry overwhelms the media, "narratives," because our area, like most other areas of the nation, is under constant assault by various corporate and political campaigns.
Today, we take a short look at the "foreclosure narrative," a story that has been in the media since early 2008, replacing the narrative about how rich we were all getting during the speculative real estate boom.
J.N. Sbranti, the McClatchy Company's ace business reporter for the San Joaquin Valley, has covered this story for several years. This month, Sbranti reports, the foreclosure rate is falling. However, for the first time we are aware of, Sbranti quotes ForeclosureRadar as the authority on the foreclosure rate rather than RealtyTrac, which has been the authoritative source since the foreclosure crisis began.(emphasis added on Aug. 18 -- see below).
So, rather than being reassured that things are getting better, without some explanation for switching authorities, we are not reassured.
Meanwhile, Rep. Dennis Cardoza, the Pimplico Kid who lives in Annapolis MD but represents his former home region in the 18th California Congressional District, is developing an election-year narrative called "Virtuous Dennis Fights for Pork against the Big, Bad Obama Machine". To be sure, it is just a version of the Great Valley Whine, wherein our business classes, claiming their independence, hard work, and noble accomplishments that have brought prosperity to so many here in the 18th CD (highest foreclosure rate in the nation), blame the federal government for not sending more money, as if at least $40.6 million in agricultural subsidies in the last year had not been perhaps spread around much.
Badlands' "narrative" is that the ordinary people of the district have been clobbered economically and political injury is added to the economic pain.
Badlands Journal editorial board
Merced Sun-Star
Central Valley foreclosure rates dropping...J.N. SBRANTI, The Modesto Bee
The foreclosure crisis seems to be easing throughout the Northern San Joaquin Valley.
Fewer homes are being repossessed and fewer homeowners are being threatened with foreclosure this summer compared to last. The percentage of delinquent mortgages also has declined for five straight months.
Don't celebrate yet.
The region's foreclosure rates remain among the highest in the nation, and a staggering number of homeowners have stopped paying their home loans.
But relatively speaking, things are better.
"Stanislaus County is further through the process than the rest of California," said Sean O'Toole, whose company ForeclosureRadar tracks homes in mortgage default throughout the state. "We are going to continue to see a general decline in foreclosure activity there."
Only 483 Stanislaus properties were lost to foreclosure during July -- 373 repossessed by lenders and 110 sold in foreclosure auctions on the courthouse steps, according to ForeclosureRadar stats.
That's less than half as many Stanislaus homes as were lost during July 2008 when the crisis peaked locally.
Also encouraging is the drop in the number of homes entering the foreclosure process. This July, 591 Stanislaus properties received notices of default, the first step in the drawn-out legal process. Last July, there were 1,081 such notices issued.
That 45 percent drop indicates foreclosures should continue declining.
It's about time.
Since the foreclosure mess started in fall 2006, about 21,000 Stanislaus properties have been lost to foreclosure. That's nearly 1 in 8 homes.
Those foreclosed homeowners walked away from about $7 billion in unpaid mortgages.
In Merced County, more than 11,000 homes were lost, leaving nearly $5 billion in unpaid mortgages. In San Joaquin County, more than 27,000 homes were lost, leaving more than $11 billion in unpaid mortgages.
Merced, Stanislaus and San Joaquin in July were ranked among the country's six worst counties for foreclosure filings by RealtyTrac, a national foreclosure monitoring service.
No longer the worst
Frequently during the last four years, Northern San Joaquin Valley counties have ranked first, second and third on that dubious list.
Las Vegas currently holds the title for having the highest foreclosure rate.
As in Stanislaus, activity at all steps of the foreclosure process has been easing this year in Merced and San Joaquin counties.
CoreLogic, another national real estate tracking company, also shows improvement for Stanislaus in the percent of homeowners behind on their mortgage.
As of June, 14.9 percent of Stanislaus homes with mortgages were more than 90 days late on payments. During January and February the delinquency rate topped 16 percent.
By comparison, nationwide 8 percent of those with mortgages are late on payments. Statewide, it's about 10.4 percent.
Traditionally, mortgage lenders started foreclosure proceedings on homes that were 90 days delinquent. That's not always the case anymore.
"Banks randomly foreclose on people (who haven't paid their mortgages) just to keep other folks with mortgages paying on time. That's the only logical conclusion I can come to in this market," said O'Toole, noting how many delinquent borrowers allowed to stay in their homes for more than a year without the foreclosure process being started. "Banks foreclose more quickly on lower-end properties than on higher-end properties because the financial losses are lower."
Fresno Bee
DENNIS CARDOZA: HUD secretary misses mark...Rep. Dennis Cardoza, D-Merced, represents the 18th Congressional District, which includes all of Merced County, about half of Stanislaus County and small portions of San Joaquin, Madera and Fresno counties. 
U.S. Housing Secretary Shaun Donovan wrote a commentary for The Bee last week in which he asserted that our foreclosure problem in the Central Valley is improving and families were receiving the relief they need. Like many of those who call my office daily, I was utterly astounded by his statements, and was deeply offended.
To assert that the foreclosure assistance programs offered under the Obama administration to this point have been successful -- and to insinuate that the assistance provided has been anywhere near adequate -- is an insult to the thousands of families that have lost their homes to foreclosure in our community.
Secretary Donovan's remarks paint an inaccurate picture and I am extremely concerned they highlight a fundamental disconnect between the reality on the ground and President Obama's administration. (You may read the complete letter on my website at www.cardoza.house.gov.)
Secretary Donovan's commentary points to a recent temporary dip in foreclosure rates in the Valley as proof that the Obama administration's housing programs are working effectively. Yet in doing so, he glosses over the fact that even when our foreclosure rates temporarily decrease, our rates of loan delinquency continue to increase.
It is an unfortunate fact that all but 1% of families who are more than 90 days delinquent in their house payments will end up in foreclosure. This means a rising tide of foreclosures is looming on the horizon.
The fact that Secretary Donovan overlooks this either demonstrates a complete lack of understanding of the foreclosure process by our nation's top housing official -- or it demonstrates an ill-conceived attempt to obfuscate the facts.
The three largest cities in my Congressional District -- Merced, Modesto and Stockton -- have continued to remain within the top 10 for the highest foreclosure rates in the nation since the recession began. According to the most recent data, as of July 29, Modesto ranks third, Merced is fourth and Stockton is sixth.
Meanwhile, the mortgage delinquency rate in my Congressional District has been rising and is currently more than 16%. We know this means that a larger tide of foreclosures is imminent. In the most simple terms: The foreclosure situation is not getting better in the Central Valley, it is getting worse.
I have stated repeatedly that the administration's primary housing programs -- the Home Affordable Modification Program and the Neighborhood Stabilization Program -- have not been effective in delivering aid to the hardest-hit communities.
Contrary to Secretary Donovan's column, on Aug. 6 the Treasury Department released additional details about the HAMP program that paint a disturbing picture. HAMP, despite receiving $50 billion from Congress, has only resulted in 4,764 permanent modifications that have lasted at least nine months.
Further, only 53,041 borrowers had received a modification for at least six months through the end of May 2010.
The facts speak for themselves. American families will continue to suffer as long as the status quo remains unchecked. Addressing the housing crisis must remain a critical component of any long-term economic recovery program.
Nowhere is this more true than in California's Central Valley. And as I have shared with President Obama many times, he is more than welcome to come see that for himself.
Sacramento Bee


Calif. homebuilding industry is a shadow of its former self


California's once-vaunted homebuilding industry

has lost 80 percent of the economic impact it had in 2005, says a new report from the California Homebuilding Foundation and Center for Strategic Economic Research. There are also 84 percent fewer employees working in residential construction than in 2005, the report said.
The new study said that new housing construction in California supported nearly 77,000 jobs and $13.8 billion in economic activity during 2009. That "represents just a fraction" of the 487,000 jobs and $67.7 billion in activity just a few years earlier in 2005, said the industry trade group, the California Building Industry Association.
The newest report adds statewide context to a Bee story early last month that noted that the Sacramento-area new-home market has come nearly to a standstill. Homebuilders have taken to say that their industry is enduring another Great Depression, far more severe than that stalking the rest of the economy.

 Re: Our references to Foreclosureradar.com in the Modesto Bee article above. Checking, we find that Mr. O'Toole of the firm is correct -- we verified that the Bee reporter has used his firm as a source on a number of occasions. This raises yet another narrative, which we might call Defense of the Honor of Foreclosure-tracking Services. From the point of view of drinking a cup of coffee on the deserted sidewalk of Main Street, Merced, mid-afternoon yesterday in sight of half a dozen empty storefronts, we inform Mr. O'Toole that his company's reputation was not, is not and will not be our primary concern. -- editors

Date: Mon, 16 Aug 2010 21:29:32 -0600
To: ......

Subject: [Feedback] Foreclosure Source
From: sean@foreclosureradar.com
Sean OToole sent a message using the contact form at
http://www.badlandsjournal.com/contact [1].
Hello, Please note that Joanne Sbranti has been publishing our stats, in addition to RealtyTrac's, for nearly 3 years. We are also regularly quoted by hundreds of other news organizations and have appeared as a credible source everywhere from the Wall St Journal to 60 Minutes. Our stats have also been used by the Center for Responsible Lending, Tenants Together and others working for "social and economic justice", as appears to be your cause. As the only source that tracks actual auction activity we are the definitive source for foreclosure data in the areas we serve - although perhaps not as well known by a few as RealtyTrac. As it appears you feel Joanne's use of our stats are somehow not credible we thought we'd take a moment to set the record straight. ForeclosureRadar.com