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Foreclosure rate high but still well below crisis levels

What some say are the last remnants of the decades-long foreclosure mess is still funneling through the local housing market.

While foreclosure activity is a whisper of what it was at the peak of the crisis six years ago, a national database reported Wednesday that Shasta County had the third-highest foreclosure rate in California in the third quarter of 2017.

One in every 439 homes was in some stage of foreclosure, ATTOM Data Solutions, formerly Realty Trac, said.

Only Kern County (1 in every 334 homes) and Riverside County (1 in every 431) had higher foreclosure rates in the third quarter, which covers July through September.

The foreclosure rate in Butte County was 1 in every 3,349.

“When people are wondering why are foreclosures still taking place, they have to understand this is one of the last bad loan products now cycling through the market,” said Josh Barker of ReMax Town Country in Redding. “The majority of these loans are interest-only that are now resetting . . . and people can’t afford the higher payment.”

And unlike many other areas of California, home values in Shasta County have not rebounded from their bubble peak, so these underwater families can’t afford to sell.

Still, the 177 total foreclosures in Shasta County in the third quarter are a far cry from what the market was going through six years ago when distressed property sales dominated and drove down values.

 In October 2011 alone, there were 467 properties that had either received a default notice, an auction sale notice or had been repossessed, ATTOM reported.

Brad Garbutt of Vista Real Estate said roughly six of every 10 sales in Shasta County in 2011 were either a foreclosure or short sale.

“The rule of thumb was if you could rent your house for less than your mortgage payment, you best just walk away,” Garbutt said.

By contrast, distressed sales made up 11 percent of the local market in 2016, Garbutt said.

“They are definitely getting to a much lower level than they were,” Garbutt said.

Meanwhile, U.S. foreclosure activity dropped to its lowest level since the second quarter of 2006, ATTOM said. One in every 695 homes was in some stage of foreclosure in the third quarter.

California’s foreclosure rate in the third quarter was one in every 795 homes.

Daren Blomquist, senior vice president of ATTOM Data Solutions, said areas that historically have struggled economically will typically have higher foreclosure numbers.

“Outside of the bad-loan debacle we had that caused the last crisis, one of the big drivers of foreclosures is job loss or loss of income,” Blomquist said.

Blomquist, though, said the numbers in Shasta County still reflect a normal housing market.

“The way we think of normal foreclosure activity is anything 1 percent or less of all housing units,” Blomquist said.

Over the first six months of 2017, a little over three-tenths of a percent of all housing units in Shasta County had a foreclosure filing.

“So if you double that, you are still on track to see historical normal levels of foreclosures in Shasta County,” Blomquist said

 

 

 

 

 

 

Article source: http://www.redding.com/story/news/2017/10/12/foreclosure-rate-high-but-still-well-below-crisis-levels/756207001/

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