Steep Increase in California Foreclosure Activity
October 18, 2006
La Jolla, CA.——Residential foreclosure activity in California
surged to its highest level in more than four years last quarter,
the result of slower home sales and flattening prices, a real
estate information service reported.
Lending institutions sent 26,705 default notices to homeowners
in the state during the three-month period ending in September.
That was up 28.3 percent from 20,812 for the prior quarter, and up
111.8 percent from 12,606 for 2005's third quarter, according to
DataQuick Information Systems.
Last quarter's number was the highest since first-quarter 2002
when 30,225 default notices were sent out. Foreclosure activity hit
a low during the third quarter of 2004 when 12,145 default notices
were recorded. Defaults peaked in first quarter 1996 at 59,897.
DataQuick's default statistics go back to 1992. The quarterly
average is 32,653.
"Foreclosures happen when people owe more on their property
that the property is worth. When prices are going up fast, as they
were last year and the year before, the number of homeowners in
that situation steadily declines. When prices are flat, or going
down, fewer homeowners in financial distress are able to use their
homes to bail themselves out of trouble," said Marshall Prentice,
DataQuick's president.
Statewide, the annual rate of home price increases hit a high
of 22.8 percent during the second quarter of 2004. Since then,
price appreciation has cooled, to 3.7 percent last quarter.
DataQuick, a subsidiary of Vancouver-based MacDonald Dettwiler
and Associates, monitors real estate activity nationwide and
provides information to consumers, educational institutions, public
agencies, lending institutions, title companies and industry
analysts.
Notices of Default are recorded at county recorders offices
and mark the first step of the formal foreclosure process.
The median age of the home loans that went into default last
quarter was 14 months, and more than half were originated in 2005.
On primary mortgages, homeowners were a median of five months
behind on their payments when the lender started the default
process. The borrowers owed a median $9,829 on a median $306,000
mortgage.
On lines of credit, homeowners were a median six months behind
on their payments. Borrowers owed a median $3,200 on a median
$60,000 credit line. However the amount of the credit line that was
actually in use cannot be determined from public records.
On a loan-by-loan basis, mortgages were least likely to go
into default in Marin, Napa and San Francisco counties. The
likelihood was highest in Fresno, Merced and Riverside counties.
Historically, the percentage of mortgages in default has been
higher in lower-cost inland markets, DataQuick reported.
Most homeowners emerge from the foreclosure process by
bringing their payments current, refinancing, or selling the home
and paying off what they owe. Still, about 19 percent of homeowners
who found themselves in default earlier in the year actually lost
their homes to foreclosure in the third quarter. A year ago it was
six percent.
Trustees deeds recorded on homes totaled 3,424 during the
third quarter, up 76.9 percent from 1,936 for the previous quarter,
and up 362.1 percent from 741 for last year's third quarter.
Trustees deeds, or actual foreclosure sales, peaked at 14,896 in
second-quarter 1997, and hit a low of 636 in the second quarter of
last year.
There are 7.81 million houses and condos in the state.
While foreclosure properties tugged property values down by
almost 10 percent in some areas nine years ago, the effect on
today's market is negligible, DataQuick reported.
Notices of Default
houses and condos
|
County/Region |
2005Q3 |
2006Q3 |
%Chg |
| Los Angeles |
3,233 |
5,565 |
72.1% |
|
Orange |
743 |
1,500 |
101.9% |
|
San Diego |
906 |
2,355 |
159.9% |
|
Riverside |
1,266 |
3,040 |
140.1% |
|
San Bernardino |
1,269 |
2,548 |
100.8% |
|
Ventura |
222 |
578 |
160.4% |
|
SoCal Total |
7,654 |
15,676 |
104.8% |
|
San Francisco |
71 |
149 |
109.9% |
|
Alameda |
438 |
803 |
83.3% |
|
Contra Costa |
507 |
1,012 |
99.6% |
|
Santa Clara |
430 |
670 |
55.8% |
|
San Mateo |
168 |
288 |
71.4% |
|
Marin |
56 |
89 |
58.9% |
|
Solano |
188 |
510 |
171.3% |
|
Sonoma |
126 |
231 |
83.3% |
|
Napa |
22 |
43 |
95.5% |
|
Bay Area Total |
2,006 |
3,795 |
89.2% |
|
Santa Cruz |
77 |
103 |
33.8% |
|
Santa Barbara |
64 |
188 |
193.8% |
|
San Luis Obispo |
50 |
94 |
88.0% |
|
Monterey |
83 |
202 |
143.4% |
|
Coast Total |
274 |
587 |
114.2% |
|
Sacramento |
697 |
1,388 |
99.1% |
|
San Joaquin |
323 |
898 |
178.0% |
|
Placer |
146 |
443 |
203.4% |
|
Kern |
361 |
741 |
105.3% |
|
Fresno |
372 |
789 |
112.1% |
|
Madera |
55 |
104 |
89.1% |
|
Merced |
132 |
282 |
113.6% |
|
Tulare |
117 |
268 |
129.1% |
|
Yolo |
48 |
101 |
110.4% |
|
El Dorado |
45 |
120 |
166.7% |
|
Central Valley Total |
2,417 |
6,017 |
148.9% |
|
Mountains |
56 |
159 |
183.9% |
|
North Calif |
199 |
471 |
136.7% |
|
Statewide |
12,606 |
26,705 |
111.8% |
|
|
Source: DataQuick Information Systems
Media calls: Andrew LePage (916)456-7157 or John Karevoll (909)867-9534