Foreclosure Homes in Visalia, California Still Increasing

The number of foreclosure homes is still rising in the city of Visalia, the county seat of Tulare County and the economic center of California’s most productive agricultural region.

Over 1,000 of Visalia’s 40,000 housing units are in foreclosure or are already counted as bank owned foreclosure homes.

In May this year, 3.2 percent of all homeowners in Tulare County with mortgage loans have received foreclosure notices, putting the 12-month overall total of foreclosure filings in the county to more than 8,300.

The mortgage default rate in the county in May jumped to nearly 10 percent, almost double the delinquency rate of 5 percent during the same period in 2008.

Housing analysts in Visalia said most foreclosure homes in the area were previously owned by borrowers who took out adjustable-rate mortgages during the boom in 2006. Aside from taking out risky loans, the borrowers also purchased newly-built houses at their peak prices, which were usually much higher than their true values.

Analysts nationwide have predicted more foreclosures in the coming months and years when adjustable-rate mortgage loans readjust to their higher rates.

However, many real estate analysts said that more mortgage delinquencies will be remedied and more houses will be saved from foreclosure as homeowners get help under the Making Home Affordable Program.

During the initial months of the federal program, only a relatively small number of homeowners were helped, but as mortgage lenders receive pressure from state governments and federal agencies to work out loan modifications, a rising number of troubled homeowners are getting help.

Recently, the nation’s largest banks like JPMorgan Chase, Bank of America and Wells Fargo have been pressed by Treasury Secretary Timothy Geithner and HUD Secretary Shaun Donovan to step up their loan modification efforts to help more troubled homeowners.

Housing analysts in Tulare County hope that the rise in foreclosure homes slows down so that the area’s housing market will be stabilized. Last year, the county’s housing inventory exceeded six months worth of inventory.

Currently, the housing inventory, including foreclosure homes, has dropped down to more than 3 months worth of inventory. The median home price has also shown some stabilization by rising from $123,000 to $135,000.

Even so, the high unemployment rate in Visalia remains one of the city’s big stumbling blocks to recovery. In April, Visalia’s jobless rate surpassed the 15 percent level, along with the rates of 13 other cities across the country. This high rate of joblessness will turn more houses into foreclosure homes.