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Tuesday, January 22, 2008

Record California Foreclosure Activity in 2007

by Calculated Risk on 1/22/2008 01:38:00 PM

From DataQuick: California Foreclosure Activity Still Rising

Click on graph for larger image.

This graph shows the NODs (Notice of Default) filed in California since 1992. For 2007, a record 254,824 NODs were filed in California. By quarter, the number is 46,670 in Q1, 53,943 in Q2, 72,571 in Q3 and 81,550 in Q4.
California Notice of Defaults (NODs)
The second graph shows the NODs normalized by the approximate number of owner occupied units in California. Normalized, 2007 foreclosure activity is 37% higher than '96 (the previous record year), as opposed to 57% higher in nominal numbers.California Notice of Defaults (NODs)
The number of mortgage default notices filed against California homeowners jumped last quarter to its highest level in more than fifteen years, a real estate information service reported.

Lending institutions sent homeowners 81,550 default notices during the October-to-December period. That was up by 12.4 percent from 72,571 the previous quarter, and up 114.6 percent from 37,994 for fourth-quarter 2006, according to DataQuick Information Systems.

Last quarter's number of defaults was the highest in DataQuick's statistics, which go back to 1992.

"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.
Last quarter's default numbers were a record in 42 of the state's 58 counties. In Los Angeles County it was 63.5 percent of the first-quarter 1996 peak.
Of the homeowners in default, an estimated 41 percent emerge from the foreclosure process by bringing their payments current, refinancing, or selling the home and paying off what they owe. A year ago it was about 71 percent. The increased portion of homes lost to foreclosure reflects the slow real estate market, as well as the number of homes bought during the height of the market with multiple-loan financing, which makes 'work-outs' difficult.
It's hard to imagine, but this year will probably be worse.