Another Jump in California Foreclosure Activity
April 22, 2008
La Jolla, CA.--The number of California homes going into
foreclosure jumped last quarter to its highest level in more than 15
years, as the market continued to works its way through declining
home values and a pool of at-risk mortgages that were originated in
2005 and 2006, a real estate information service reported.
Lending institutions sent homeowners 113,676 default notices
during the January-to-March period. That was up by 39.4 percent from
81,550 the previous quarter, and up 143.1 percent from 46,760 for
first-quarter 2007, according to DataQuick Information Systems.
Last quarter's number of defaults was the highest in
DataQuick's statistics, which go back to 1992.
"The main factor behind this foreclosure surge remains the
decline in home values. Additionally, a lot of the 'loans-gone-wild'
activity happened in late 2005 and 2006 and that's working its way
through the system. The big 'if' right now is whether or not the
economy is in recession. If it is, the foreclosure problem could
spread beyond the current categories of dicey mortgages, and into
mainstream home loans," said Marshall Prentice, DataQuick's
president.
Most of the loans that went into default last quarter were
originated between August 2005 and October 2006. The median age was
23 months, up from 16 months a year earlier.
On primary mortgages, California homeowners were a median five
months behind on their payments when the lender started the default
process. The borrowers owed a median $11,474 on a median $346,750
mortgage.
On home equity loans and lines of credit, homeowners were a
median eight months behind on their payments. Borrowers owed a
median $3,512 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.
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.
Although 113,676 default notices were filed last quarter, they
pertained to 110,392 homes. The difference is the result of some
borrowers defaulting on multiple loans (e.g. a primary mortgage and
a line of credit).
Last quarter's default numbers were a record in almost all of
the state's 58 counties. The notable exception being Los Angeles
County, which was particularly hard hit by the recession of the
early 1990s. During last quarter, the county's 20,339 defaults
represented 94.8 percent of its peak quarter back in Q1 of 1996,
which saw 21,444 defaults.
On a loan-by-loan basis, mortgages were least likely to go into
default in San Francisco, Marin, and San Mateo counties. The
likelihood was highest in Merced, San Joaquin and Stanislaus
counties.
Of the homeowners in default, an estimated 32 percent emerge
from the foreclosure process by bringing their payments current,
refinancing, or selling the home and paying off what they owe. A
year ago it was about 52 percent. The increased portion of homes
lost to foreclosure reflects the slow real estate market, as well as
the number of homes bought during the height of the market with
multiple-loan financing, which makes 'work-outs' difficult.
Multiple-loan financing peaked in Q4 of 2006 at 60.9 percent of
all financed home purchases. Last quarter it was 15.9 percent.
Trustees Deeds recorded, or the actual loss of a home to
foreclosure, totaled 47,171 during the first quarter. That's the
highest since DataQuick began tracking Trustees Deeds in 1988. Last
quarter's total rose 48.9 percent from 31,676 in the previous
quarter, and jumped 327.6 percent from 11,032 in first quarter 2007.
In the last real estate cycle, Trustees Deeds peaked at 15,418 in
third-quarter 1996. The all-time low was 637 in the second quarter
of 2005.
There are 7.9 million houses and condos in the state, DataQuick
reported.
Foreclosure resales have emerged as a significant market
factor, accounting for 33.1 percent of all California resale
activity last quarter. A year ago it was 3.2 percent. Foreclosure
resales vary significantly by area, from 5.1 percent in San
Francisco County to 66.7 percent in San Joaquin County.
Notices of Default
houses and condos
|
County/Region |
2007Q1 |
2008Q1 |
Yr/Yr% |
|
|
|
|
|
| Los
Angeles |
8,843 |
20,339 |
130.0% |
|
Orange |
2,644 |
7,082 |
167.9% |
| San
Diego |
3,931 |
8,975 |
128.3% |
|
Riverside |
5,750 |
15,022 |
161.3% |
| San
Bernardino |
4,357 |
11,149 |
155.9% |
|
Ventura |
965 |
2,176 |
125.5% |
|
Imperial |
258 |
566 |
119.4% |
|
SoCal |
26,748 |
65,309 |
144.2% |
|
|
|
|
|
| San
Francisco |
216 |
420 |
94.4% |
|
Alameda |
1,578 |
3,194 |
102.4% |
|
Contra Costa |
1,969 |
4,718 |
139.6% |
|
Santa Clara |
1,058 |
3,074 |
190.5% |
| San
Mateo |
382 |
911 |
138.5% |
|
Marin |
118 |
314 |
166.1% |
|
Solano |
914 |
2,091 |
128.8% |
|
Sonoma |
407 |
1,392 |
242.0% |
|
Napa |
88 |
284 |
222.7% |
| Bay
Area |
6,730 |
16,398 |
143.7% |
|
|
|
|
|
|
Santa Cruz |
171 |
447 |
161.4% |
|
Santa Barbara |
372 |
897 |
141.1% |
| San
Luis Obispo |
181 |
385 |
112.7% |
|
Monterey |
458 |
1,468 |
220.5% |
|
Coast |
1,182 |
3,197 |
170.5% |
|
|
|
|
|
|
Sacramento |
3,234 |
6,898 |
113.3% |
| San
Joaquin |
1,721 |
4,657 |
170.6% |
|
Placer |
518 |
1,031 |
99.0% |
|
Kern |
1,297 |
3,211 |
147.6% |
|
Fresno |
1,116 |
2,464 |
120.8% |
|
Madera |
184 |
523 |
184.2% |
|
Merced |
511 |
1,759 |
244.2% |
|
Tulare |
436 |
947 |
117.2% |
|
Yolo |
197 |
488 |
147.7% |
| El
Dorado |
219 |
394 |
79.9% |
|
Stanislaus |
1,141 |
3,192 |
179.8% |
|
Kings |
88 |
182 |
106.8% |
| San
Benito |
107 |
272 |
154.2% |
|
Yuba |
151 |
357 |
136.4% |
|
Colusa |
20 |
81 |
305.0% |
|
Sutter |
114 |
337 |
195.6% |
|
Central Valley |
11,054 |
26,793 |
142.4% |
|
|
|
|
|
|
Mountains* |
291 |
588 |
102.1% |
|
|
|
|
|
|
North Calif* |
755 |
1,391 |
84.2% |
|
|
|
|
|
|
Statewide |
46,760 |
113,676 |
143.1% |
* includes additional counties
Source: DataQuick Information Systems
Media calls: Andrew LePage (916)456-7157 or John Karevoll (909)867-9534
Copyright 2008 DataQuick Information Systems. All rights reserved.