Defaults surge in Kern on eve of commission hearing
| Monday, Sep 06 2010 06:42 PM
Last Updated Monday, Sep 06 2010 06:42 PM
Default notices were up sharply in August after having dipped lower for a time, numbers from the Kern County Recorder's office show, providing an unsettling spike on the eve of the federal Financial Crisis Inquiry Commission's hearing Tuesday in Bakersfield.
Some 1,100 default notices were recorded in Kern last month, a 27 percent jump from July's 867 filings and about even with a year earlier.
Default notices, the first legal step in a possible foreclosure, hit an all-time high locally in March 2009 at 1,750 before easing off in subsequent months. County records go back to 1995.
By May this year, the pace of monthly filings had declined to 683. But numbers drifted back up into the 800s in June and July before August's surge.
Gary Crabtree of Affiliated Appraisers in Bakersfield, who is testifying at the FCIC field hearing, said he is paying more attention to foreclosure sales than to defaults.
"The foreclosures have been pretty steady between 600 and 700 per month, but REO sales are declining and supply took a pretty good-sized jump in the past couple of months," Crabtree wrote in an e-mail.
"REO sales" refers to "real estate owned," or foreclosed properties being sold by banks and other institutions.
Generally, a jump in housing supply can drive down prices. Crabtree said prices are "bouncing along the bottom" at $142,900. A "ton of short sales" -- future foreclosures -- are currently on the market, he added, with only about a quarter getting sold to buyers rather than being foreclosed on.
Homebuilder Warren Peterson of Warren Peterson Construction Inc., who will also testify in front of the 10-member commission, said the real estate meltdown has created an "extremely difficult" market for new home builders.
"The financing tools we once relied on have dried up and gone away," Peterson said. He has transformed his business to include general construction and remodeling. The market won't turn around until consumer confidence is restored, Peterson believes.
Bakersfield will be the first of four cities where commissioners will hear testimony from "main street" figures, including community bankers, real estate professionals and citizens impacted by the financial meltdown. Retired Bakersfield Rep. Bill Thomas is vice-chair. Hearings will also be held in Las Vegas, Miami and Sacramento this month. The commission has already heard testimony in New York and Washington, D.C. from Wall Street figures and regulators.
Tuesday's hearing starts at 9 a.m. in county supervisors' chambers at 1115 Truxtun Ave.
