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A hard day's loss in home foreclosures
| Friday, Apr 4 2008 6:00 PM
Last Updated: Friday, Apr 4 2008 4:28 PM
By one measure, you could say about $2.1 million worth of Kern County mortgages vanished March 27.
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Tom Bass, owner of BNS Painting in Tehachapi, puts a fresh coat of paint on the walls of 1205 Lucerne Drive in Bakersfield. The home was forclosed on, and has now been sold and fixed up by the new owner, who hoped to resell it this weekend, Bass said.
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A similar amount could be disappearing every business day as the real estate market grinds back to solid ground. The $2.1 million figure comes from a Californian survey of foreclosed properties sold back to the market on a recent random day: Thursday, March 27.
Sales of 16 bank-owned homes recorded that day totaled more than $3.3 million, property records show.
But lenders had given out much more than that before the homes foreclosed.
Failed mortgages made against the 16 properties — all drawn up in 2005 and 2006, when the market felt hot to most folks — totaled more than $5.4 million, The Californian’s survey found.
The difference amounts to roughly $2.1 million gone south.
Calculating actual bank losses will, of course, be more complicated.
Foreclosure documents for the 16 homes show, for example, defaulted homeowners owed more than they originally borrowed when properties went to the auction block. That’s because interest and fees were tacked on to the debt.
Three other sales by banks recorded March 27 were not included in our survey because ownership changes were unclear or property was transferred to the federal Housing and Urban Development Department.
Comparison with records five and 10 years ago indicate the current situation is fundamentally different.
Sales on the fourth Thursday in March of 2003 and 1998 turned up no comparable sales of bank-owned properties. Some homes went from banks to the Housing and Urban Development Department or another federal agency. Those transactions, which function differently than regular residential sales, and are generally not included in market studies.
Lenders ultimately tally red ink from failed loans after they sell off foreclosed properties.
Sales of bank-owned homes, when gathered from markets nationwide, will eventually let analysts figure out how much lenders have lost from the mortgage crisis.
In the meantime, details from The Californian’s survey provide a snapshot of how the final stages of foreclosure are currently playing out on local streets.
Click on the first six stories above for details about all the properties.