The Foreclosure Report

Defaults Surge In California

The Contra Costa Times from California. "Solano and Contra Costa counties, where much of the Bay Area's once-booming housing market soared in recent years, now have the third- and fourth-highest rate, respectively, of foreclosure in California. A year ago, Contra Costa County ranked 11th on the list."

"The numbers are rising at a time when many borrowers who took out adjustable-rate loans years ago are now paying bigger mortgages after the end of introductory rates. 'I think that's the biggest trigger,' said real-estate agent Earl Rozran. 'All of a sudden, payments have jumped a couple hundred dollars.'"

"Statewide, 14,806 properties in September were in some type of foreclosure proceeding. 'I think what we are starting to see in California is the effect of (rising) adjustable-rate mortgages. The whole state has risen pretty dramatically over the last six months in terms of the number of properties in foreclosures,' said Rick Sharga, VP at RealtyTrac.com."

The North County Times. "Foreclosure activity has shown a dramatic increase in San Diego and Riverside counties, far outpacing most of California and the rest of the nation, according to a foreclosure tracking firm. San Diego County had 4,069 properties in some stage of foreclosure for the quarter that ended in September, compared with 970 properties for the same quarter in 2005, an increase of 319 percent."

"Riverside had 4,403 such properties for the most recent quarter, versus 1,297 for the same quarter in 2005, an increase of 239 percent."

"Alan Gin, professor of economics at the University of San Diego, blamed the trend on the region's high cost of housing. 'The housing prices are so much higher here that people got stretched getting into a home,' Gin said. 'If you got into a $600,000 home in San Diego, you're much more likely to default than someone in a $200,000 home in Dallas.'"

"Mark Fabela, director-elect for the board of the North San Diego County Association of Realtors, said the foreclosure increases were because of dropping housing prices. When housing prices decline, some people can't refinance their way out of high mortgages. 'People actually overextended themselves,' Fabela said. 'They get to the point where they can't make the payments.'"

The Daily News. "The state's foreclosure activity has risen more than 40 percent over the last two months. 'I think a lot of buyers unfortunately got into some risky loans that may not have been in their interest,' said James Joseph, (broker) in Whittier."

"Increased foreclosures are a product of a market slowdown, said David Reid, a licensed real estate broker and licensed contractor. The market was moving so fast for a few years that homes would sell before they went to foreclosure, he said. But now that the market has slowed, homes are not selling and are foreclosed."

"In recent years, people had to decide within hours whether or not to buy a home, he said. 'Maybe those who bought the homes stretched because they had to make a quick decision,' Reid said."

posted by Ben Jones @ 12:11 PM