The worst may be over.
Foreclosure statistics for 2009 show home losses leveled out in Stanislaus, San Joaquin and Merced counties. Far fewer homes were repossessed by lenders last year than in 2008.
"It is very, very likely we have hit bottom and the worst is behind us," said John Karevoll of MDA DataQuick Information Systems, which compiles foreclosure and mortgage default data from public records.
Karevoll called the Northern San Joaquin Valley "ground zero" for the foreclosure crisis, which began 3½ years ago. Since then, nearly 50,000 homes in the three counties have been lost to foreclosure.
Almost half those foreclosures were during 2008, but the carnage eased a bit last year.
In Stanislaus County, there were 5,815 foreclosed houses and condos last year, which was 29 percent fewer than the year before. The number of Stanislaus homes entering the foreclosure process also declined about 10 percent.
That may be statistically true, but housing counselors say record numbers of homeowners are seeking relief from mortgages they can't afford.
"We've seen no decrease in our counseling activi- ties," said Martha Lucey, president of ClearPoint Credit Counseling Solutions' Pacific region. "We had our highest-call-volume day the Monday after Christmas. We were shocked."
Lucey said lenders may be filing fewer default notices and foreclosing less often, but dealing with them hasn't gotten any easier.
"There are still communication issues," said Lucey, noting how homeowners fight an uphill battle getting through to decision makers. She said negotiating with lenders continues to be frustrating, and permanent loan modifications are rare. "We have not seen any dramatic changes in the number of people being able to stay in their homes."
University of California at Merced economics Professor Shawn Kantor also questioned whether 2009's foreclosure statistics accurately reflect homeowner problems.
"I don't know that we're turning the corner," Kantor said. "Our three counties have very high mortgage delinquency rates."
More than 16 percent of Stanislaus County mortgages are 90 days or more delinquent, double the national average, according to First American CoreLogic.
Kantor said lenders may be delaying some foreclosures "for economic and political reasons."
"They are managing the flow of foreclosed houses so they don't completely overwhelm the real estate market and further drive down home prices," Kantor explained.
Banks are recognizing that foreclosing is not in their financial interest, agreed Jeffrey Michael, director of the Business Forecasting Center at the University of the Pa- cific in Stockton.
Bank behavior has changed
The valley's declining foreclosure rates are "a sign that banks are behaving differently, not that homeowners are in any less distress," Michael said.
He said something major needs to happen to stabilize neighborhoods where home values have plummeted.
"If you bought a home anytime between 2002 and 2008, you're underwater," said Michael, referring to homes that are worth far less than their outstanding mortgages. He said lenders might have to reduce the principal on those underwater loans "so homeowners can see the light at the end of the tunnel, which might convince them to continue paying their mortgages."
Otherwise, more and more homeowners may simply walk away from their debts.
Patterson real estate agent Heidi Vento said many homes already are empty, and she doesn't understand why lenders delay putting those homes on the resale market.
"There is a huge number of people who want to buy homes," said Vento, last year's president of the Central Valley Association of Realtors. "We're getting multiple offers to buy every one of our listings."
Vento said there's a "shadow inventory" of bank-owned homes that first-time buyers can afford and are qualified to buy.
"But the banks are controlling what goes on the market and when," Vento said. "We're really just not sure why they're holding onto all this inventory."
Karevoll offered an answer: "Banks are just trying to minimize their losses."
Homeowners concerned about their mortgages can get free, HUD-certified advice and counseling from ClearPoint Credit Counseling Solutions by calling 800-750-2227 for an appointment.
Bee staff writer J.N. Sbranti can be reached at firstname.lastname@example.org or 578-2196.