Experts say the foreclosure crisis will get worse before it gets better. With many buyers taking a wait and see attitude, the bidding wars of yesterday are nowhere to be found.
Investors used to be able to snap up bargains at the foreclosure auction in front of the County Courthouse. That's not the case anymore. "People come down here and think you can buy something cheap and in reality, by the time you buy the property and fix it up and pay all the liens and charges its tough" said foreclosure specialist Chris Mathys.
Many homes in the Valley are up for sale because of risky financing. In John Perea's case, his adjustable rate mortgage or "ARM" re-set and his monthly payment ballooned. "We had the ARM and the ARM reached out and slapped us" said Perea, "We had the arm and the arm reached out and slapped us."
Refinancing was not an option. "By then it was too late for us because things had begun to snowball."
Perea has opted for the "Short sale." His lender has agreed to accept less than the total amount due. And unlike foreclosure; his credit rating won't take a hit.
David Mendoza of the community housing council said, "A short sale is really just getting out without additional problems. You're still gonna lose your home."
Mendoza advises homeowners who face foreclosure. In December alone, 380 people came in for counseling at this HUD-approved agency.
The number of Valley residents able to keep their homes might not seem very high, until you compare it to the rest of the country. "We're doing very good. We're at 10% percent of clients that work with us. The national average is 1% percent" said Mendoza.
Mendoza says the important thing is that you explore every possible option before foreclosure.
If you're having trouble with your mortgage payments you can call this local foreclosure prevention hotline. Its "No Homeowner Left Behind" and the number is:
No homeowner left behind: (559) 234-1492