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San Mateo Daily News

 

January 16, 2008

 

By Tim Simmers / MediaNews

 

 

County foreclosure auctions doubling

 

 

Foreclosure auction sales doubled in San Mateo County in December compared to the same period last year, a new real estate report revealed Tuesday.

Some 64 homes were sold at foreclosure auctions last month countywide, up 205 percent, according to ForeclosureRadar, a Web site that tracks California foreclosure sales.

Notices of default, the first notices sent to homeowners who don't make mortgage payments for 60 days, are also rising in the county and state, a sign that future auction sales will climb, the report said.

In January, California is headed for a record $10 billion in foreclosure auction sales, according to Ginny Cain McMurtrie, spokeswoman for ForeclosureRadar. That's up from a record $5 billion in October.

"You're looking at the most homes sold by auction in any month ever in California in January," McMurtrie said.

Most of the foreclosure sales involved subprime loans, which gave many first-time buyers low interest rates for an introductory period. But after a year or two, the interest rates adjusted up so high the new homeowners couldn't pay their mortgages.

McMurtrie added that many homes that go to auction don't sell, because the banks that took them back don't lower the price enough.

"The banks are having to make deep discounts, and take deep losses to sell," McMurtrie said.

For example, a bank could be faced with taking back a house bought two years ago for $500,000 that's now worth $410,000, she said.

The local areas hardest hit by foreclosures are Daly City, South San Francisco, East Palo Alto, Redwood City, Pacifica and San Mateo, real estate agents say.

San Mateo County's doubling of foreclosure sales was low compared to other counties in the state. It ranked 46th among 54 counties measured statewide. The ranking was determined by comparing population in the county to the number of foreclosure auction sales.

Riverside County topped the list with 1,838 sales in December, up 547 percent from December 2006.

Santa Clara County ranked 39th with 261 sales, up 383 percent.

Alameda County ranked 24th with 368 sales, up 318 percent. Contra Costa County ranked 12th statewide with 526 sales, up 406 percent.

The San Joaquin Valley was among the hardest hit by foreclosures.

Merced County ranked third statewide with 215 sales, up 1,244 percent. San Joaquin County ranked fourth with 542 sales, up nearly fivefold. Sacramento County ranked sixth with 972 sales, up nearly threefold.

Notices of default in San Mateo County hit 185 in December, up 16 percent compared to November. That compares to a month-over rise of 45 percent for defaults statewide in December.

"The banks I've worked with are becoming more aware of their own vulnerability," said Joe Rodden, broker with Prudential California Realty in Redwood City. "They're trying to sell the house before they take it back."

In October, the real estate research firm DataQuick said third-quarter foreclosures in San Mateo County tripled compared to the same period in 2006.