The Foreclosure Report

Slowing S CA Markets 'Produce Rise In Defaults'

Another foreclosure firm found rising defaults in California. "A real estate information publisher reported today that a slowdown in price appreciation in several Golden State markets is producing a predicted rise in mortgage defaults."

"Alexis McGee reported 10,247 Notices of Default for the third quarter of 2005 in the major southern California counties, while in eight of the nine Bay Area counties, the total was 3150. '"Defaults in California's southland are moving off the historic baseline because the hot markets there are finally cooling down,' Ms. McGee said."

"She added that defaults were still low in the Bay area because their price correction had just barely begun. 'We saw a little jump in Sacramento County to 1051 defaults in the third quarter, up from 919 in the second quarter, and that market is definitely slowing, especially at the high end.' She went on to say that when prices cycle over the top, weakness first appears in the most expensive segment of markets across the country."

"We will see an increase in mortgage defaults for several reasons. For example, according to a report by CNBC, 45% of all loans out there are adjustable rate mortgages. As rates rise, their payments will be going up. With little growth in real personal income, those households are vulnerable,' she said."

posted by Ben Jones @ 10:53 AM