There's nowhere tougher in America to be paying a mortgage than Yuba County, says a new lending industry study released Monday.
Nearly 78 percent of the county's mortgage debt is tied to houses that have lost value and are worth less than what's owed on them, said New Jersey-based SMR Research in its yearly "Giants of the Mortgage Industry" study.
"That was the worst on the hit parade," said SMR President Stuart Feldstein.
The report said 60.3 percent of the county's 10,558 mortgage borrowers owed more in February than their homes were worth. The phenomenon is commonly called being "underwater" or "upside down."
The statistics mean most struggling Yuba County borrowers can't refinance out of their troubles. The majority are ineligible, too, for President Barack Obama's plan to help underwater owners, which is limited to homes whose value is no more than 5 percent below what's owed.
"A lot of these people are better than 40 percent underwater," said Ruben Ramos, a county real estate broker.
Feldstein said Monday that most who are underwater nationally bought or refinanced from 2004 through 2007, when home prices were higher and lending standards lower.
About one-third of U.S. mortgage debt is tied to "underwater" homes, he said, while 22.4 percent of borrowers owe more than their home value.
"They got big loans, which is one reason they're underwater now," he said.
Most analysts believe a majority of Yuba County borrowers are still paying on their loans, but being underwater is considered a foreclosure risk.
Earlier this decade, Yuba County was home to a real estate boom as thousands of Sacramento commuters sought its bigger homes and lower prices. Home builders produced 4,200 new houses there from 2002 through 2007, according to real estate researcher MDA DataQuick.
But the county's median sales prices, which peaked at $387,000 in 2005, have tumbled 57.8 percent to $160,000.
"This is a once-in-a-century kind of phenomenon," said Sanjay Varshney, dean of the College of Business Administration at California State University, Sacramento.
Three other of the top five U.S. counties in this fix are in California, according to SMR. The rest of the top five list:
• Merced: 76.6 percent of the county's mortgage debt and 55.9 percent of mortgage borrowers are underwater.
• San Joaquin: 74.3 percent of debt and 56.4 percent of borrowers are underwater.
• Stanislaus: 73 percent of debt and 53.9 percent of borrowers are underwater.
• Clark County, Nev. (Las Vegas): 72 percent of debt and 57.6 percent of borrowers are underwater.
Nationally, a third of homeowners – average age 63 – own their homes free and clear of mortgages, Feldstein said.
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Call The Bee's Jim Wasserman, (916) 321-1102. Read his blog on real estate, Home Front, at www.sacbee.com/blogs.
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