Foreclosure Rates Still Cause for Concern in Petaluma

Among the concerns mentioned by the Occupy Petaluma protesters, foreclosures are high on the list. Many people have lost their homes, either after being laid off from their jobs or when their adjustable rate mortgages reset.

A quick survey of RealtyTrac, a site that monitors foreclosed properties around the country, shows that Petaluma has the second largest number of foreclosures in the county, with 90 foreclosures recorded in September and 100 in August. (The first in overall foreclosures is Santa Rosa.)

See the graphics on the right for a breakdown

East Petaluma has been disproportionately impacted with 1 out of every 246 homes in some state of foreclosure, meaning they have either received a notice of default, will be sold at a foreclosure auction or have been repossessed by the bank. The westside is doing significantly better with 1 out of every 391 homes in foreclosure.

It's been two years since the federal government passed the Making Home Affordable Program that allows homeowners facing foreclosure to petition banks for loan modifications if they can prove hardship, like unemployment or an injury.

But according to local housing experts, the program has not been very effective because banks are dragging their feet processing the requests.

“What ends up happening is some people can hang in there and make their mortgage payment while the loan modification is approved,” said Bertha Medina, HUD certified housing specialist with California Human Development, a Santa Rosa nonprofit. “But because it takes so long (6-8 months) somewhere along the line, most people still end up defaulting.”

Medina advises anyone who is unable to make a payment on their home to alert their bank right away and try to work out some modification and then call a HUD certified housing specialist to see what options are available. The HUD certification is important because many fraudulent operators have jumped into the fray, promising to save people's homes only to make off with their money.

Like many others, Medina is frustrated with what she sees as unwillingness on behalf of banks to be more flexible with homeowners.

“If a bank would allow a property to go into short sale, they stand to lose 30 percent, but if they allow it to go into foreclosure, they are facing 50 percent loss,” she said. “So it doesn’t make sense that banks are letting these properties go to foreclosure and not giving homeowners time. Because time, time is really everything.”

Have you had your home foreclosed or are facing foreclosure now? Share your story.