Monday, August 14, 2006

'Defaults Jump' In Newport-Mesa, CA

From the Daily Pilot in California. "The number of defaults on Newport-Mesa home loans jumped dramatically in the second quarter of the year compared to 2005, a rise some experts say could be the result of the sluggish real estate market. According to DataQuick, in Newport Beach the number of defaults skyrocketed, showing a 118% jump from the periods in 2005 to 2006. The number of defaults in Costa Mesa went up more than 50%."

"'The real story is not just the number of defaults going crazy, but the number of properties that are actually making it to auction, and that has increased dramatically,' said Kurt DeMeire, CEO of a Huntington Beach corporation that researches and processes foreclosures."

"In today's market, more homes are making it to auction and going back to the lender because the home no longer has equity, DeMeire said. 'Most people think it's just junkie properties that go into foreclosure,' he said. 'Every neighborhood in the county has foreclosures every day.'"

"Keith Cotarelo, president of Signature Loan Group, said he expects to see more bank-owned homes after the auction process is complete. 'Personally I think you're going to see a lot more bank-owned properties, and in turn they will have to change some of the lending practices,' he said. 'I see it coming around to eliminating some products.'"

"In particular, Cotarelo said, the practice of 100% financing has hurt homeowners in the long run."

"'A lot of them have been caught in the crux of creative financing and the reality of what the rates have done. A lot of lenders selling the product were not explaining it very well,' he said."


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