Foreclosures Remain High in Santa Barbara County

Experts may be talking about a revival of the real estate sector but this is far from being true. Many Americans are still finding it difficult to make mortgage payments and hence, foreclosures are high. Take, for instance, Santa Barbara County. Foreclosures have remained high throughout this year.

The number of foreclosures is pegged at 1,184. Besides 3,141 homeowners are in various stages of default. Banks have already sent them notices about impending takeover. During the corresponding period of the previous year, there were 1,750 foreclosures. Ninety per cent of these foreclosures were recorded in North County. This was revealed by county clerk-recorder, Joe Holland.

Holland said that foreclosures were at a record high in 2008 but this year the level was slightly lower. Holland said that although the foreclosure number is less this year, yet there has been more default notices filed, 400 more to be precise. It may be noted that a default notice initiates foreclosure by giving homeowners three months to rectify the issue or resume mortgage payments.

The lender sells the property and takes the amount in order to pay the debt. It may be noted that default notices are more than foreclosures. One primary reason for this is short sales where the owner sells the property at a price which is much lower than what he owes to the lender. Another reason is loan modification, where homeowners are getting the opportunity to revise the mortgage payment as per the Federal Making Homes Affordable program. Initially, the program has had many hiccups. However, now the banks are taking steps to hasten the process. Already loans of 500,000 people have been modified on an experimental basis of three months, and loans of many more will be revised soon.

According to data available with the county, there were 107 foreclosures in 2009. last year, the average was slightly less at 160. Holland said that the figures are definitely consistent with the other parts of the country. According to the Mortgage Banker Association report, till September 30, one in each 7 homes is in foreclosure stage. In the beginning of the year, the number was pegged at one in every 10. This is because of unemployment. As people lost jobs even those with excellent credit history floundered on mortgage payment. The trend would continue until there is considerable improvement in the employment scenario. The number of unemployed in the county now stands at 34,000.