Ground Zero.... the Foreclosure Capital of America! Stockton, CA
Can I have a minute... to recap 60 minutes from the Foreclosure Capital of America or Ground Zero - Stockton, CA.

Stockton is located 80 miles East of San Francisco and 80 miles North of San Jose. Stockton, CA has a population of over 290,000 people. A large amount of that population moved into Stockton starting back in with the real estate bubble in 2003, coming from the Bay Area and the Silicon Valley. The median house was sold at $230,000 (4 Bedroom single family home). By 2005, that same house had a value of $400,000. And now in 2008, same house is probably
selling for 70% or less.



Stockton: Foreclosure Capital USA
by Maricel Ferrer-Custodio on September 13th, 2007
According to RealtyTrac, Stockton is the foreclosure capital of USA. In a population of 300000, 1 in 27 households is facing foreclosure. Stockton had 8000 foreclosures so far in 2007.

Among the neighborhoods in the area, Weston Ranch; a 15-year old subdivision of modest tract homes has the worst foreclosure rate. In fact, it has 350 homes for sale right now, equivalent to 5 years in inventory.

According to a local broker in Weston Ranch, Geri Taylor:

"Houses are sitting on the market three times as long as in 2006 and the average sale price had dropped by 10 percent…Nobody has a crystal ball, but I don't expect to see an improvement until 2010."

With foreclosures this bad, what have this community done wrong?

Many borrowed 100% of their purchase price including their closing costs.
Adjustable rate mortgages were offered to lot of subprime borrowers.
Many availed of a teaser rate, but were not able to meet their mortgage commitments when the rates went up.
In their desire to pursue their American dream of owning a home, many people bought houses that they cannot really afford. As Taylor mentioned "Adjustable rate mortgages offered to sub-prime borrowers, hopeful homeowners with shaky credit, lured families into houses with inflated prices."