Calif. Foreclosures Hit 20-Year High

January 22, 2008 12:00:00 AM PST
Foreclosures reached a 20-year high in California during the fourth quarter of 2007 as a growing number of homeowners fell behind on their mortgage payments, a real estate research firm said Tuesday.A total of 31,676 homes ended up in foreclosure during the quarter ended Dec. 31, marking the highest figure since DataQuick Information Systems began keeping such numbers in 1988.

The total represents a 30.8 percent increase from the previous quarter and a 421.2 percent jump from 6,078 foreclosures in the same quarter of 2006, DataQuick said.

In addition, 81,550 default notices were sent to homeowners statewide between October and December, up 12.4 percent from the previous quarter and more than 114 percent in the year-ago quarter, according to DataQuick.

The default tally in the most recent quarter was the highest number recorded by DataQuick since it began keeping those figures in 1992.

The notices serve as an early indicator of possible foreclosures. Mortgage defaults have been on the rise statewide since fall 2005, coinciding with the start of a slowdown in sales and lagging home appreciation.

When home appreciation slows, it makes it harder for homeowners who fall behind on payments to sell their homes and clear the debt.

Most of the home loans that slipped into default during the fourth quarter of 2007 were made between August 2005 and October 2006, the final months of the housing boom.

The median age of home loans in default increased to 22 months from 15 months in the fourth quarter of 2006.

The change suggests sagging home values are eating away at equity, placing more home loans at risk of foreclosure, the firm said.

"We think depreciation is the main culprit," said Andrew LePage, a DataQuick analyst.

The median home price in California peaked at $484,000 last March but had slipped to $402,000 by the end of the year as the housing boom went bust.

The median amount of the primary home loans in default was $340,000; the median amount homeowners fell behind was $11,121, the firm said.

Borrowers who took out home equity loans owed a median of $3,379.


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