DQNews Archived Article

California Foreclosures up from 1994

by Real Estate Analyst John Karevoll
August, 1995

La Jolla, CA.—The number of California homeowners being foreclosed on increased slightly last month, a real estate information service reported.

Lending institutions initiated foreclosure proceedings on a total of 9,998 homeowners in July. That was down 10.5 percent from 11,166 in June, but it was up 13.6 percent from 8,802 for July last year, DataQuick Information Systems reported.

So far this year, 75,164 California house and condo owners have received a Notice of Default, the first step of the formal foreclosure process. That number is up 4.6 percent from 71,826 for the first seven months of last year.

On a property-by-property basis, Southern California still has almost twice the foreclosure problem that the rest of the state has, although the severity of the problem is spreading somewhat, DataQuick reported.

An ongoing statistical analysis of DataQuick's foreclosure and property sales database has surprisingly revealed that a financial institution's lending policies are far more important than previously assumed in determining foreclosure severity. Some lending institutions with fine-tuned lending policies have only one-fifth the problem of other lending institutions

Portions of the statistical study, conducted by American Savings Bank researcher Donald G. Wilson, will be presented at next week's Real Estate Research Council meeting at California State Polytechnic University, Pomona.

DataQuick monitors real estate activity nationwide and provides information to consumers, lending institutions, title companies and industry analysts.

Foreclosure homes currently sell for 15.7 percent less than non-foreclosure homes, putting a severe drag on home prices, especially in Southern California.

The region's median resale house price dropped 4.1 percent to $165,000 during the last 12 months, while the Bay Area median has increased 2.2 percent to $235,000, DataQuick reported.

Source: DataQuick Information Systems

For more information call John Karevoll (909)867-9534

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