There were 12,531 foreclosures in Solano County in the past 12 months.

Solano County foreclosure rate slowing
By Rachel Raskin-Zriehn/Times-Herald, Vallejo
Posted: 11/29/2008 01:01:04 AM PST

Solano County's per-household foreclosure rate may be slowing but it remains worse than nearly anywhere else in the nation, according to a newly released survey.

But this is expected to start turning around by this time next year, an industry expert said this week.

"Solano County foreclosures are at 8.54 percent, which is nearly four times greater than the national average of approximately 2.5 percent," Serdar Bankaci, founder of New York-based Default Research said Monday. Default Research recently released the survey results.

"The local economy in Solano County is not doing well, either, with an approximate unemployment rate of 7.7 percent, according to the State Employment Development Department."

Solano is not California's worst-hit area, however. That dubious honor goes to Riverside where 12.12 percent of households entered foreclosure in the past year, Bankaci said.

Foreclosures in Solano County grew from a low of 224 in January 2007, to a high of 1,528 this past August, according to the survey. The survey showed there were 759 foreclosures last month in Solano County. Default Research shows there were 12,531 foreclosures in Solano County in the past 12 months.

The problem is expected to worsen before improving, Bankaci said.

"The reason we see the slowdown last month is the new law California passed, requiring a 30-day notification period," he said. "But this only postpones the inevitable in most cases, and we're already seeing an increase again in foreclosures in October."

Solano Association of Realtors president Lori Collins said she concurs with this assessment, though foreclosures will likely remain slow through the holidays. That's because a foreclosure moratorium will be in place until then for mortgages held by troubled lending giants Freddie Mac and Fannie Mae.

Nevertheless, even as home sales climbed, prices continued dropping in the Vallejo area and statewide.

"In some areas of northern California, including Solano County, we have seen home prices fall between 30 and 40 percent," Bankaci said. "I think things will continue to get worse for about three to six more months, before we see the area hit bottom and begin to recover."

Even planned government intervention won't have an instantaneous impact, Bankaci said.

"Much of the government bailout, interest rates, etcetera, have a six- to nine-month lag before affecting the economy," he said. "By this time next year, we hope to see declining foreclosure rates in this region."