California Mortgage Defaults Hit 15 Year High, Foreclosures Surge to 20 Year High

January 22, 2008 No Comments »

According to a DataQuick report released today, mortgage defaults in California rose to the highest level in more than 15 years during the fourth quarter, while the total number of defaults was the highest since the company began gathering statistics in 1992.

The real estate information company said mortgage lenders sent California homeowners 81,550 default notices during the October-to-December period, a 12.4 percent increase from the 72,571 in the previous quarter, and a 114.6 percent from the 37,994 notices in the fourth-quarter of 2006.

“Foreclosure activity is closely tied to a decline in home values. With today’s depreciation, an increasing number of homeowners find themselves owing more on a property than it’s market value, setting the stage for default if there is mortgage payment shock, a job loss or the owner needs to move,” said Marshall Prentice, DataQuick’s president.

The company said the median price paid for a California home peaked at $484,000 last March and fell to $402,000 by the end of 2007.

The bulk of the loans that went into default last quarter were originated between August 2005 and October 2006, with a median age of 22 months, up from 15 months a year earlier.

Those behind on first mortgages statewide were on average five months behind on their payments when the lender started the default process, owing an average $11,121 on a median $340,000 mortgage.

On home equity lines of credit, the typical homeowner was seven months behind on their mortgage payment, owing $3,379 on a median $56,000 credit line.

Of the homeowners in default, an estimated 41 percent emerge from the foreclosure process by refinancing, selling the home, paying off what they owe, or becoming current on the loan, down from 71 percent a year ago.

The company also noted that mortgages were most likely to go into default in Merced, San Joaquin and Stanislaus counties, and least likely in San Francisco, Marin, and San Mateo counties.

Trustees Deeds, or those recorded when a home is lost as a result of foreclosure, totaled 31,676 during the fourth quarter, the highest level since DataQuick began tracking them in 1988.

That marked a 30.8 percent increase from the 24,209 recorded in the third quarter, and a whopping 421.2 percent from the 6,078 in fourth quarter 2006.

Leave A Response