(California) State mortgage default rates at eight-year high, firm says

[MindPilot]

By Emmet Pierce
STAFF WRITER

January 25, 2007

Home mortgage loans throughout California went into default last quarter at the highest rate in more than eight years, the DataQuick Information Systems research firm reported yesterday.

Lenders sent notices of default, the first step in the foreclosure process, to 37,273 homeowners during the fourth quarter. It was a rise of nearly 37 percent from the previous quarter and an increase of 145 percent from the fourth quarter of 2005, said DataQuick analyst John Karevoll.

(snip)

California mortgages were least likely to go into default in Marin, San Francisco and Santa Clara counties during the fourth quarter, and most likely to go into default in Merced, Riverside and Tulare counties, Karevoll reported.

Regarding that "strong" economy, it's interesting to note that red counties are seeing the highest rates of foreclosure while the blue counties have the lowest.

[Tempest]

1. The Central Valley is seeing the worst of it

And this is just the beginning.

[Spangle]

2. Yep!

"Regarding that "strong" economy, it's interesting to note that red counties are seeing the highest rates of foreclosure while the blue counties have the lowest."

I kinda noticed that.

"It was a rise of nearly 37 percent from the previous quarter and an increase of 145 percent from the fourth quarter of 2005."

Good Grief! 37% increase is bad. 145% increase, is well..

I only really know anything about just one of the counties mentioned. If I'm correct, the home value skyrocketed there, by gross amounts. Even apartment prices when up to gross amounts. Making it difficult for 'commen' persons not only unable to buy a home in the area, but difficult to afford to rent.

I don't remember the numbers exactly. But if I remember right, homes that went for something like 70,000 jumped to 150,000, then to 200,00, then 300,000. People made money, that is for sure. But in the end, someone got stuck with a very costly home. If that many people are forclosing, then I would assume the market will become flooded with forclosed homes. Banks will have their 'investment' tied up, making no money. When they unload it, they may have to let it go for less then they loaned out. The 'loss' will be expected to be paid by the person who lost their home. Good luck with that! The amount would most likely be so great, that they might never be able to pay it back. THey are forever ruined and the bank are going to be left holding the short end. Which will leave them less able to loan out money in the future to those who wish to buy homes.

I feel sorry for the people. But on the other hand I don't. And that bothers me, cause that isn't like me. The area that I'm thinking of, was extreamly 'red.' Nasuating "red." The kind who believed that those who lost their homes, deserived what they got. That they should work harder to pay their bills. That it's their own fault for not having the moeny to pay their bills. That should have had the 'forsight' to figure out that they need to plan for such events. They had a good job, and they expected that their life would never change. Such problems only happened to liberal loosers.

Sad! Sad! Sad!

[TX-RAT]

3. Were they fixed rate mortgages?