Notices of default — when a lender tells a mortgage holder that the foreclosure process is beginning — peaked at 2,277 in fiscal year 2010-11. That same year, a record 927 foreclosed homes were sold at auction.
By last fiscal year, both default notices and auctions had dropped by almost two-thirds, according to the Assessor-Recorder’s Office, with 875 notices of default and 363 sales. And the first two months of this fiscal year suggest an even sharper drop in foreclosures.
That might sound like good news to distressed homeowners. However, issues of affordability and displacement are still very real, said Supervisor David Campos, who requested the data be compiled.
“It’s good news, but we have to understand that this issue is more complicated than numbers,” said Campos, who is pushing for legislation that would have San Francisco assist distressed homeowners. “We still have a number of families who are being pushed out … and we have to consider ways The City can help them.”
Other cities in the Bay Area have taken drastic measures to keep residents in their homes. Richmond, for example, is pursuing seizing underwater or bank-owned homes by eminent domain and selling them back to their occupants at market rate.
That approach has been criticized by the banking industry, which says such an approach would hurt The City’s credit rating and ability to sell bonds.
San Francisco might not go to that extreme, said Campos, whose push at City Hall has yet to be calendared for a public hearing. In the meantime, as rents and home prices continue to rise, the foreclosure crisis still stalks The City’s poorest neighborhoods.
No recent data exist, but according to a 2010 study, the neighborhoods hardest hit were the Excelsior, Ingleside and Crocker-Amazon, with 97 homes sold at foreclosure auctions; Bayview-Hunters Point, with 86 sales; and Visitacion Valley, with 68.
These neighborhoods have also been the most resistant to the rapid rise in home prices.
As a result, many other homeowners whose mortgages did not go into default are underwater, according to Supervisor John Avalos, who represents the worst-hit area.
“It’s still an issue,” said Avalos, who unsuccessfully tried to insert language into last year’s housing trust fund ballot measure that would have made city funds available to troubled homeowners. “It’s not quite as bad as it was, but it’s still pretty darn bad.”