DQNews Archived Article

California Foreclosures Surge

by Real Estate Analyst John Karevoll
November, 1996

La Jolla, CA.— The number of California homeowners going into foreclosure jumped in October to its highest level in more than half a year as lending institutions moved to clear their books of bad loans, a real estate information service reported.

Lenders started foreclosure proceedings on 14,598 homeowners in October. That was up 19.4 percent from 12,227 for the month before and up 13.1 percent from 12,904 for October last year, according to DataQuick Information Systems.

October's number was the highest since 15,473 formal foreclosure proceedings were started last March, an all-time high.

"With home sales at their strongest level in six years and with the improving economy, this increase in foreclosure activity doesn't reflect homeowner distress as much as it indicates that lenders have decided to hack away more aggressively at their backlog of non-performing mortgage loans," said Donald L. Cohn, DataQuick's CEO.

The surge of foreclosure activity was most apparent in the Central Valley where 2,523 Notices of Default were recorded, up 49.6 percent from 1,686 for October last year. The year-over-year increase was a modest 6.7 percent in Southern California where it went from 8,929 a year ago to 9,523 last month. San Diego and Orange counties saw year-over-year decreases.

The Notice of Default is the first step of the formal foreclosure process, which can take four months or more. Many homeowners either bring their mortgage payments current, deed the property to the lender, or sell their home and pay the mortgage off before the foreclosure process is completed.

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

So far this year 137,766 California homeowners have been drawn into the foreclosure process, up 24.1 percent from 111,015 for the same period last year, DataQuick reported.

Source: DataQuick Information Systems

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

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