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Thursday, Mar. 11, 2010

Mixed real estate news for Merced County

Foreclosures are down but still high as market improves.

A pair of at-odds reports about the local housing market were released Wednesday.

The good news: local foreclosure activity was down last month, compared to one year ago, and Merced no longer leads the state's counties in the number of foreclosure filings counted.

The mixed news: Merced was listed as a small housing market expected to perform the best this year in a forecast created by Local Market Monitor. The company offers investors local market risk intelligence based on how high they think local housing prices will climb.

The company's most recent home price data shows that many of the previously poor-performing housing markets, including several in California, could be on the road to recovery. These markets had consistently been among the worst markets nationwide because of long-term speculative buying and inflated housing construction, according to a release from Local Market Monitor.

Merced County, which posted high foreclosure rates calculated for the last few years, took a fall in the company's most recent data. The county saw 688 foreclosure filings in February 2010, down 10 percent from last month, and nearly 40 percent from February 2009.

Merced is now ranked sixth statewide in the overall rate of foreclosure filings; Stanislaus County jumped to the top spot.

RealtyTrac's filing rate includes borrowers who are at least three months late on mortgage payments, houses slated for sale at public auction, and houses that have gone back to the bank.

Atwater Realtor Andy Krotik said the still-high foreclosure rate has created two local phenomena: an all-time high in the affordability rate, and super-short windows to buy. Seventy-nine percent of county residents who have a job can qualify for a home mortgage, given the lower prices, he said. But homes are flying off the market; the average number of days it takes to sell a home was 35 days in January. (It took 76 days one year ago.)

Melissa Franks is one of the many local past-due borrowers who are trying to save their homes. She's been battling to modify her mortgage for more than two years and has been through five modification trials through her bank, she said.

Franks' house on the west side of town is valued at $78,000, but she owes $242,000, she said. Her mortgage payments take up 50 percent of her monthly income, and she's had to put off home repairs to clear out mold and leaky pipes, she added.

"There's no way I can make cuts. I've got to feed my kids, I've got to clothe them," she said about her son and daughter. "I need to have a car for work, so I can't cut that."

Franks hired a company to help her lower her mortgage payments, she said.

It is illegal in California for a company to take payments in advance for foreclosure, modification or short sale workouts. Such fraudulent offers should be reported to the Merced County District Attorney's real estate fraud unit at 1944 M Street, Merced, or by phone at (209) 385-7383. Spanish speakers can call (209) 385-7383, ext. 4229.

Residents facing foreclosure should call a foreclosure avoidance counselor approved by the U.S. Department of Housing and Urban Development. A local provider, Clearpoint Credit Counseling Solutions, can be reached at (209) 723-3572.

Reporter Danielle E. Gaines can be reached at (209) 385-2477 or dgaines@mercedsun-star.