Merced Foreclosures, Job Losses Soared, Yet Snubbed by HUD
Merced foreclosures and job losses soared in 2009, but the HUD did not give Merced County any money from its second NSP funding round. Merced posted the highest rate of foreclosure rate in California in 2009.
Merced foreclosures and job losses soared in 2009, but the Housing and Urban Development Department did not allocate any money to the area in its second round of distribution of Neighborhood Stabilization Program funds.
With 10.1 percent of its homeowners struggling from default or foreclosure in 2009, Merced posted the sixth-highest county rate nationwide and the highest foreclosure rate among counties in California. Nearly 8,400 foreclosures were posted in the county during the year, up from the 8,291 foreclosures filed in 2008.
Over the period September 2006 to the last month of 2009, almost 9,600 residential units were repossessed, many of which were already sold to people buying foreclosures for sale. During the same period, over $3.6 billion in outstanding mortgage payments remained unpaid.
In addition to the record foreclosures, the rate of defaults in the county also rose. In November last year, 19 percent of all homeowners in the county were in default by at least three months, increasing expectations of more foreclosures this year.
The record number of Merced foreclosures in 2009 pulled down the median sales price in the county to $115,000, far below the average sales price of $362,398 in June 2006, based on data from a San Diego residential real estate tracking firm.
Despite the record foreclosures, Merced and other foreclosure-hit counties in the Central Valley – Stockton, San Joaquin and Stanislaus – did not receive any money from the NSP second funding allocation. Among Valley cities, only Modesto got something from NSP – an allocation of $25 million.
Representative Dennis Cardoza, whose 18th District covers portions of Stockton, said he had written HUD Secretary Shaun Donovan and asked him to do something about the omission. Cardoza even related that he previously toured Donovan around his district and showed him the devastation caused by foreclosures.
Cardoza also argued against the reported reason for the rejection – that Central Valley cities have not shown their ability to remodel foreclosure properties. He reiterated that it is unfair to require rehabilitation achievement levels viable in larger cities but impossible in smaller cities that are financially struggling.
All in all, however, California foreclosures got a lot of attention from HUD. It gave more than $318 million to the state, a huge amount of money especially when compared to the measly $20.9 million given to Nevada, the most battered state in 2009.
As in other counties battered by job losses, Merced foreclosures soared largely because of the worsening unemployment situation. In November, the jobless rate in Merced shot up to 18.3 percent, up from 12.4 percent in October.
By Cassiano Travareli