California Epicenter of Foreclosures Shows Steep Challenge Facing Obama

[marmar]

California Foreclosure Center Shows Obama Challenge (Update2)
By Dan Levy


Feb. 18 (Bloomberg) -- It has taken Susan Erb just three years to see the value of her Merced, California, home plunge by more than half to $350,000. Next month, her mortgage payment jumps 20 percent to $3,321 and she knows she can’t afford it. Her bank won’t rework the loan unless she stops paying altogether.

“Now I know how people feel when I go knocking on their door,” said Erb, 53, a real estate agent who works for a company that notifies residents in foreclosed properties that they must vacate. “I’m in their shoes.”

Merced, the epicenter of the U.S. foreclosure crisis, demonstrates the steep challenges President Barack Obama will face in trying to stem defaults. One in 59 housing units in the Merced metropolitan area received a foreclosure filing in January, the highest rate in the U.S., according to RealtyTrac Inc., an Irvine, California-based seller of default data. For- sale signs are everywhere and a building boom fueled by subprime mortgages has been brought to a standstill. Just 16 construction permits were issued last year. In 2005, there were 1,427.

“We’re ground zero,” said Merced Mayor Ellie Wooten, 75. The city, population 81,000, had an unemployment rate of 15.5 percent in December, “and it’s going to get worse,” she said. ...................(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601109&sid=anivYFRvAz3s&refer=home

[bluestateguy]

1. I thought he and Hillary talked about a 90 day freeze on foreclosures in the campaign

At the time I was skeptical, but I think this may have to be an option now: no new foreclosures for 90 days.

[EFerrari]

2. How could something like that be enforced? That's what I don't understand.. n/t

[flvegan]

3. Well, if the president handed down a federal rule of some sort

that made it such that judges' foreclosure calendars be suspended, I'd think that would work. Lenders could file the lawsuits (in judicial states) but judges couldn't begin to hear them. This would only work for primary lender foreclosures and not other lien foreclosures. That would be unfair.

Non-judicial states, I have no idea, short of suspending auction calendars.