Calif. mortgage defaults up in 4Q |
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Wed, 24 Jan 2007 22:27
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LOS ANGELES (AFX) - Mortgage defaults in California more than doubled on an annual basis in the last quarter of 2006, with most of the troubled loans taken out by homeowners within the last two years, a real estate research firm said Wednesday.In all, 37,273 default notices were sent to homeowners between October and December, up 145.3 percent from 15,196 in the fourth quarter of 2005, San Diego-based DataQuick Information Systems said.The number of defaults last quarter marked a 36.9 percent increase from 27,218 in the third quarter of 2006, and was the highest for any quarter since the third quarter of 1998, the firm said.Mortgage defaults have been on the rise statewide since fall 2005, coinciding with a slowdown in sales and lagging home appreciation that began that year. The notices serve as an early indicator of possible foreclosures.When home appreciation slows, it makes it harder for homeowners who fall behind on their mortgage payments to sell their homes.Most of the mortgage loans that went into default last quarter were taken out between January 2005 and last February, the firm said.'Most defaults occur a year or two after the loan was made, so we are in a period where the loan pool is at risk,' said Marshall Prentice, DataQuick's president.The median age of the loans in default last quarter was 15 months, the firm said.The median amount of primary mortgage loans in default was $324,000; the median amount homeowners fell behind in paying was $10,555.Most of the default notices were sent to Southern California addresses, with homeowners in Los Angeles County receiving the largest number of notices.About 32 percent of homeowners who had previously been in default lost their homes to foreclosure in the fourth quarter, up from 8 percent in the same quarter of 2005, DataQuick said.The number of foreclosed homes last quarter was 6,078, compared with 874 in the fourth-quarter of 2005 and 3,435 in the third quarter of last year, the firm said.Copyright 2006 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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