Yumans losing homes on the rise

Editor's note: This is one in a series of stories - Coping with Joblessness - examining Yuma County's high unemployment number and its impact in different sectors. Today's story looks at Yuma's foreclosure rates how jobless can affect them.

Along with the Yuma-area's climbing unemployment rate, the number of home foreclosures also is on the rise.

It's a trend that likely will continue into the coming months.

"Foreclosures are alive and well," said Realtor Vicki Bardo, "unfortunately."

A variety of factors is driving the trend, she said. While a homeowner's loss of a job isn't the only reason a family loses its home, it certainly ranks among the top factors.

"Each story is different," she said. But they all come down to: "If you can't make the payments, you can't do it."

Bardo continued: "What's going on is awful. As far as what is happening to people, there's nothing nice about going into foreclosure."

Many of the people who are losing their home today probably should never have been given a loan in the first place, she said.

And with a foreclosure on their credit history, it will be a long time before they will again.

Bardo said that in the 25 years she's been in the real estate business, she's never seen foreclosures like those occurring now.

The numbers confirm her observation.

In 2005, there were 38 foreclosures in the Yuma area, according to Paul Shedal of Yuma Stats.

The number has increased dramatically each year since then.

The following year, there were 79 foreclosures. The number jumped to 390 in 2007, nearly tripled to 908 in 2008 and rose to 1,405 in 2009.

So far in 2010, the numbers indicate a slight downward shift at 193. But the numbers are suspect, said Shedal. For one thing, Yuma County changed its timing on the monthly foreclosure report and for another, February was a short month.

Bardo also has seen a slight tapering off of foreclosures, although she only works with one lender.

She has seen more homes going to short sales — the sale of a home at less than is owed on it — that also likely is impacting the number of foreclosures.

"That's possibly better from the perspective of the lender and the owner," Bardo said.

Shedal agreed that there are more short sales and referred to what he calls the "5 percent spiral."

He explained that the banks may say to sell a property at 95 percent of the appraised value — unless, of course, they can get a better price. But that depresses the market value so the next round of short sales will be even lower.

Another thing he's observed is that more distressed properties in recent years are actually going to foreclosure.

In 2005, 10 percent of distressed properties were foreclosed, he said. "That meant 90 percent worked out something else."

In 2009, the foreclosure rate for distressed properties stood at 70 percent. So far in 2010, the foreclosure rate is 63 percent of distressed properties, a rate Shedal expects to edge back up to 70 percent in the near future.

Shedal and Bardo are in agreement that the market is far from the end of the staggering number of foreclosures, linked at least in part to the area's rising unemployment rate.

"There are still a lot of foreclosures out there," Bardo said. "I still don't think the end is in sight yet from what I've seen."

Shedal attributed the first wave of foreclosures to the alternative loans that many homebuyers obtained during the height of the real estate boom, such as adjustable rate mortgages (ARMs).

"We've seen the worst of the ARMs readjusting," he said. "Now we have the cascading effect of unemployment. I don't see any hope in the near future. We've already had the best months (for employment) of the winter."

That leaves the approaching summer months when Yuma County's unemployment tends to be at its highest.
---
Joyce Lobeck can be reached at jlobeck@yumasun.com or 539-6853.

FORECLOSURES
The Yuma Sun has partnered with RealtyTrac — the fastest growing real estate site on the Internet and a leading online marketplace for foreclosure properties. This partnership offers to offer MyYumaHome.com users a comprehensive online real estate experience for foreclosure properties in the Yuma area. On the Web site, part of the Yuma Sun's Internet presence, people can find information on foreclosure homes, pre-foreclosure homes, auction homes and bank-owned homes as well as resale homes, new homes and for sale by owner homes.