Housing Crisis Puts Strain on Central Valley

March 1, 2008 12:00:00 AM PST
According to Realty-Trac, California had 57,000 foreclosures in January; up 7% from the month before and double the national average.Saturday there was a bi-city effort to help keep some people in their north valley homes.

Stockton is the unofficial foreclosure capital of the country, with 6,300 homes in the foreclosure process.

Fresno currently has 4,200, Merced 1,300 and Los Banos 1,100.

Heather Schaefer moved from Morgan Hill to Los Banos two years ago because of lower home prices. "We bought the house for $452,000. We basically were put into a loan we couldn't afford at first. We were told by the broker 6 months after we closed we would be able to re-finance and the payments would go down."

She says that didn't happen and now her payments are hiking from $2,700 a month to $5,100 a month.

"We can barely make the $2,700?We just started being able to make the $2,700 payment and now they've bumped it up effective as of today to $5,100."

She attended one of two foreclosure prevention workshops held in Los Banos and Merced Saturday.

Los Banos city leaders say Schaefer's home, like many others facing foreclosure, is in a newer subdivision.

Tommy Jones, Los Banos Mayor, says "Those would be the first homes that sold at maybe $400,000 to $450,000, so with the decline, that home is probably only worth $250,000 or $300,000; because some of our homes have had a 50% reduction."

Banks are preparing for more people with rising payments. Luis Sanchez, Washington Mutual, says "We still see we have customers that are going to have interest rate resets and we're being proactive by contacting them before that happens to ask them if they're going to have any difficulty in the future."

Counselors advised home owners to call their lender or a mortgage counselor to try and reach a new agreement.

Assemblywoman Cathleen Galgiani, (D) Merced, says she wants to keep banks accountable and asked attendees fill out a consent form so she can contact them after the workshop.

"We want to be able to follow-up and ensure that each of the people who was here is getting a response from the lender."

More foreclosure prevention workshops are planned later this month in Stockton and Modesto.

    Upcoming Foreclosure Prevention Workshops:

  • Friday March 7th: Stockton
    2pm to 8pm
    San Joaquin Fairgrounds
    1658 South Airport Way
    Stockton, CA 95206

    The event will include one-on-one lender meetings, home foreclosure prevention, and educational seminars. Participants should bring mortgage paperwork.


  • Saturday March 8th: Modesto
    8am to 2:30 pm
    Stanislaus Agriculture Center, Harvest Hall
    3800 Cornucopia Way,
    Modesto, CA
  • The event will include one-on-one lender meetings, foreclosure prevention counseling, and educational Seminars. Participants should bring mortgage paperwork.


  • Saturday March 29th: Modesto
    9am to 3pm
    Modesto Centre Plaza
    1000 K Street
    Modesto, CA
  • The event will include one-on-one meetings with lenders and housing credit counselors. Participants should bring mortgage paperwork.

For event information contact: Teresa Kinney (209) 527-1914

For more information on avoiding foreclosure in California visit the U.S. Department of Housing and Urban Development..


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