California foreclosures jump to 20-year high

California Foreclosure News

Article Abstract: According to sources, California foreclosures reached a 20-year high with a harrowing 63,061 foreclosures in the second quarter of 2008.  These CA foreclosure figures only account for a 33 percent increase from the second quarter of 2007, indicating rates were set to reach this high point. Sources conclude that because the percent increase from 2007 CA foreclosures and 2008 Ca foreclosures was not too dramatic, we may be nearing a plateau.  The California notices of defaults were even higher. However, notices could be multiple for just one foreclosure property. For the full CA default article, please continue reading below:
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SAN FRANCISCO (Reuters) - The number of homes lost to foreclosure in California soared to a 20-year high in the second quarter and mortgage default notices jumped to a record as well, underscoring the depth of the state's housing downturn, a DataQuick Information Systems report released on Tuesday said.

Foreclosures in California in the second quarter totaled 63,061, marking their highest level since the real estate information service began tracking them in 1998. This represents an increase of 33.5 percent from the prior quarter and 261.0 percent from a year earlier, the report said, taking note of the increasing share of the resale home market claimed by foreclosures.

"Foreclosure resales have emerged as a significant market factor, accounting for 40.0 percent of all California resale activity last quarter. A year ago it was 5.4 percent," the report said.

Defaults notices on mortgages jumped by nearly 125 percent in the second quarter from a year earlier, notching a record high as more and more home owners with risky home loans stepped toward foreclosure, DataQuick's report added.

Pointing to "declining home values and the rampant spoilage of a batch of especially risky home loans made in late 2005 and 2006," the report by the real estate information service said mortgage servicers recorded 121,341 notices of default from April through June period, up 6.6 percent from the prior quarter and 124.9 percent from a year earlier.

DataQuick noted the second-quarter's total of notices was the highest in its records. The firm held out some hope the quarter-on-quarter increase suggests the pace of mortgage defaults may be moderating.

"The small increase in defaults from the first to the second quarter may indicate that we're nearing a plateau," said John Walsh, DataQuick's president.

"We won't know until the end of the year, but it may be that some lenders are starting to prioritize workouts with homeowners instead of grinding things through the foreclosure process. Of course, they may just be swamped and can't handle processing any more paperwork," Walsh said.

While 121,341 default notices were filed in the second quarter, they involved 118,020 homes because some borrowers were in default on multiple loans, such as a primary mortgage and a line of credit.

Default notices were at record levels in nearly all counties in California, with mortgages most likely to be in default in Merced, San Joaquin and Stanislaus counties, inland housing markets where financing home purchases with risky adjustable-rate mortgages was popular during the state's housing boom earlier this decade.

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