Stockton, California Tops Foreclosure List

RealtyTrac, an online market of foreclosure properties, released data on their study of the top ten areas with high rates of foreclosures. California was the state that topped their list, with four cities making the top 10, and Stockton leading the way at number one.

The study also showed that other areas, such as South Carolina and Texas, seem to be showing a decrease in the number of foreclosures they have seen in the past year. However, the overall trend is that foreclosures are still on the rise as the rates steadily increase throughout the U.S.

Due to California’s adjustable-rate mortgages, interest-only loans were applied for at an alarming rate when homebuyers flooded the market in 2000, purchasing properties. These loans gave low and fixed rates for the first couple of years, but then the rates and payments increased, crippling the homeowners.

Other buyers exaggerated the amount of their income and/or assets and lenders did not verify these figures. As the homeowners’ payments became harder to make, they had no other resources to use to make the payments and foreclosures ensued.

The number two city on RealtyTrac’s list was Detroit, with one of every 29 households going into foreclosure. Keep in mind that Detroit has gone through some major changes, including the loss of many jobs due to auto factories closing in the area. Rounding out the top five were Las Vegas (one in 31), Riverside/San Bernadino (one in 33), and Sacramento (one in 36).

Of those areas with low foreclosures rates, Richmond, VA had the lowest at a rate of one in every 2,319 households going into foreclosure. Mc Allen, TX also made the “low list” at a rate of one in 1,494.