The federal rescue of FannieandFreddie is just one sign we aren’t at the bottom of the housing mess yet.
Other signs are all over Stockton, California. First dubbed “The Foreclosure Capital of America” a year ago, I came back this month, expecting to find some signs of a turnaround. I was disappointed.
In September 2007 when I first reported from Stockton, one in 27 homes was in foreclosure. Now it’s one in 25.
“It’s horrible,” says Valerie Gambrell, a day care provider who’s been renting a house here for 13 months. Her landlord apparently stopped paying the mortgage in April, the house went into foreclosure, and now Gambrell has to vacate. This is the SECOND home she’s rented in Stockton that has gone into foreclosure. Gambrell says she could really use the $1,500 security deposit she gave the landlord, but he can’t be found. “It’s like they have no heart or compassion,” she says. Well, some have compassion. The bank is offering her $4,000 to be out of the house in 30 days and leave the place clean. That will get her first/last month’s rent plus a security deposit at a new place. Will she rent another house? “Never. I will never rent a house here again.”
Foreclosures are up 300 percent from a year ago in Stockton’s San Joaquin County, and prices have fallen nearly in half, to a median of $215,000. Go to RealtyTrac and you’ll find more than 11,000 homes for sale here listed as either bank owned, auctions, or in preforeclosure. Only 52 houses are on the market as just regular old resales. That’s not even one percent.
The good news, pending sales are up 500 percent from a year ago. Homes are selling.
Still, no one seems to think we’re through the worst of it. “If we have the bulk of defaults in the pipeline now, we could wash it out within 12 months,” realtor Kevin Moran told me. When I asked if he thinks the “bulk of defaults” is in the pipeline, he answers, “No.”
And then he showed me something which took my breath away. Inside one foreclosed home we found all the walls stripped bare, all the outlets torn out, as thieves stole every inch of copper wiring. For some inexplicable reason, whoever did this gathered up most of the drywall and sheet rock into large trash bags and just left them there. “At one time there was $295,000 owed against this property,” Moran says. Now he has it listed for $71,000, but given the new damage, “I think a more conservative investor will offer (the bank) $25,000 all cash.” $25,000 for a home in California. You’d think even the land was worth more than that. Not here.
The first video clip here is more with Kevin Moran.