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REALTOR®: California Foreclosure Activity Still Rising

Realtors advise troubled homeowners to seek help early

Monday, January 28, 2008

The number of mortgage default notices filed against California homeowners jumped last quarter to its highest level in more than 15 years, a real estate information service reported. However, mortgages were least likely to go into default in San Mateo County, according to DataQuick Information Systems.
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, DataQuick Information Systems reported last week.

“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.

Lenders sent 625 notices of default to homeowners in San Mateo County during the fourth quarter of 2007, up 84.4 percent from 339 the same period last year. Worst hit among the Bay Area counties were Contra Costa, with notices of default up 151.8 percent; Sonoma, up 199.7 percent; Napa, up 152.9 percent.

Most of the loans that went into default last quarter were originated between August 2005 and October 2006. The median age was 22 months, up from 15 a year earlier, indicating that the pool of at-risk home loans is getting larger.

On primary mortgages statewide, homeowners were a median five months behind on their payments when the lender started the default process. The borrowers owed a median $11,121 on a median $340,000 mortgage.

On lines of credit, homeowners were a median seven months behind on their payments. Borrowers owed a median $3,379 on a median $56,000 credit line. However the amount of the credit line that was actually in use cannot be determined from public records.

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. Trustees Deeds recorded, or the actual loss of a home to foreclosure, totaled 31,676 during the fourth quarter. There are 7.9 million houses and condos in the state, DataQuick reported.

On a loan-by-loan basis, mortgages were least likely to go into default in San Francisco, Marin, and San Mateo counties. The likelihood was highest in Merced, San Joaquin and Stanislaus counties.

“While we have foreclosures in the area, we are fortunate San Mateo County has not been hit as hard as other areas in the state. We still are very concerned about these foreclosures and urge financially troubled homeowners to seek help immediately,” said Sue Walsh, 2008 president of the San Mateo County Association of REALTORS®.

Members of the San Mateo County Association of REALTORS®, a local trade organization representing over 3,800 REALTORS® and affiliate members engaged in the real estate business on the Peninsula, advise homeowners who anticipate they will soon be falling behind on their mortgage payments to call 888-995-HOPE (or visit 995HOPE.org). This toll-free, confidential hotline is sponsored and funded by the Homeownership Preservation Foundation, a nonprofit dedicated to preventing foreclosures. Through the hotline, the foundation offers free advice and counseling to homeowners.

The San Mateo County Association of REALTORS® (SAMCAR) is a professional trade organization representing over 3,800 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula. SAMCAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in San Mateo County.

The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.

Variations of this article have appeared in local area newspapers.

For further information, please contact Julie Ziemelis, Director of Public Affairs, e-mail , or phone (650) 696-8214.

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