Foreclosure activity in Fresno County has plummeted to its lowest level since 2005, thanks to foreclosure-help programs and a housing market that is regaining strength after years of instability.
Last month, 480 households in Fresno County received a foreclosure notice or was returned to the bank, according to RealtyTrac, a foreclosure listing service. One in every 653 homes was in the foreclosure process.
When foreclosures peaked in March 2009, one in every 120 homes, or 2,537 households, were in foreclosure.
"That's all good news," said John Shore, executive director of the Community Housing Council, a Fresno nonprofit housing counseling agency. "We knew things would come back — we just didn't know when or how soon."
Time has allowed the foreclosure problem to work itself out, housing experts say, along with state and national programs that lowered mortgage payments and rising home prices that are now pulling underwater mortgages up for air.
But the experts are cautious about calling this a foreclosure recovery. A large number of mortgages are still underwater and despite programs designed to help homeowners, many still can't find a mortgage solution or their cases are being handled improperly.
"I would be crazy if I didn't say we are certainly headed back into good times, but I'm apprehensive because there's just so many factors involved," Shore said.
While the numbers show a decline in foreclosures, the demand for help from distressed homeowners Valley-wide remains high, especially as other community agencies cut their foreclosure education programs, said Shore, whose foreclosure workshops continue to fill up every week.
Foreclosure activity is expected to hold steady the rest of the year, but there is a possibility for an uptick in early 2014. Delayed foreclosures or those that have taken their time through the review process — as mandated by the California Homeowner Bill of Rights and the National Mortgage Settlement — could start popping up.
Daren Blomquist, vice president at RealtyTrac, doesn't expect that short-term increase to affect the overall housing recovery, although it could put a damper on the rapidly rising home prices experienced this year.
The good news is that "the markets have worked through the majority of bad loans that triggered the foreclosure crises," Blomquist said "Homes that have already foreclosed are gone or have moved into alternative solutions, like a loan modification."
The California mortgage agreement, a side deal to the national settlement, has already brought more than $389 million in mortgage relief to Fresno County, helping more than 2,000 homeowners reduce their loans or relocate after a short sale.
"Each program is taking a bite out of the elephant," Blomquist said.
How about that rumored shadow inventory of foreclosures? Forget about it, Blomquist said.
"I really don't think the shadow inventory has materialized like people thought it would," he said. "The biggest risk is still the high percentage of homeowners underwater out there."
But this year's rapidly increasing median home price, which soared 19% in August from a year ago, is helping underwater homeowners.
"Home prices have clearly bottomed out and are rising," Blomquist said. "That is helping people who are still out there who have bad loans and haven't been able to find a foreclosure alternative. Those people now have a lifeline to avoid foreclosure — home equity."
Real estate agent Greg Holmes chuckles when asked about foreclosures. At one point it seemed like foreclosures would never go away, said Holmes, who has listed and sold many bank-owned foreclosure properties.
"Things are better now, but it's still a scary situation," said Holmes, who had no foreclosure listings this year. "It's still around the corner and won't ever go away completely."
Last year, Holmes listed only two foreclosure homes for sale. That's a big change from prior years when he's listed at least two dozen foreclosures for sale each year.
"In 2008 and 2009 I had a lot of foreclosure listings and then it seemed like it dried up and went into the short-sale market," Holmes said. "Foreclosure properties have just really become rare."
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