California Foreclosures Hit New Quarterly Record: 16,683

The number of homeowners losing their house to foreclosure shot to a new record of 31,676 in the last quarter of 2007, Los Angeles Times reports. Research firm DataQuick says that 41% of homeowners currently in default can keep their homes if they bring their payments current, refinance, or sell their home, down from 71% the year prior. Hey, at least it’s sunny.

Pain goes through the roof [Los Angeles Times] (Thanks to Nicole!)


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  1. rbb says:

    What I want to know about the foreclosures is did the homeowner over extend themselves in the first place? Was their payment more than 1/3rd of their monthly income? In most case, I bet it was.

  2. HRHKingFriday says:

    That’s interesting that it dipped down to almost nothing before shooting straight up. Maybe a lot of people took out second mortgages and HELOCs as a way of sticking their fingers in the dam?

  3. dgcaste says:

    Ouch! Good thing for renters down in San Diego, though, where renting was expensive as hell even in tiny little shithole apartments. It’ll ultimately be good for the local economy to see some enterprisers move down there and make some business, instead of having a homeowner’s market comprised totally of 1980’s real estate agents and doctors and surfers with rich parents.

  4. m4ximusprim3 says:

    @HRHKingFriday: I would think that that period right there is the problem. It seems that a certain level of defaults would be healthy healthy, because it would mean that some people (due to unfortunate but normal circumstances) can’t afford their homes anymore.

    If EVERYONE can afford their loan for several years, it means loan terms are too easy, resulting in rapid appreciation of home value and too many loans.

  5. RandoX says:

    It’s always sunny in Philadelphia.

  6. SoCalGNX says:

    Remember “supply and demand”? If homeowners are losing their homes, they will enter the rental market. Therefore, fewer rentals will be available. So its not so good news for renters in SD or anywhere else.

  7. chilled says:

    we’re all screwed!! Just wait til the local gov. starts to feel the squeeze from lost tax revenue,because they can never reduce spending,the crying will really start!

  8. Nemesis_Enforcer says:

    Hey I am in L.A. but its raining. I wish it was sunny, no one out here can drive in the rain.

  9. JeffM says:

    No, I don’t think that is really it- (though I’m sure that is a common practice, especially now) the reason people weren’t foreclosing is it took about 30 minutes to sell a house (including the 10 minutes it took to pound the sign into the ground) With rapid appreciation and rabid buyers doing anything to get into homes it wasn’t a challenge to sell a house if you found yourself in financial troubles- obviously that is not the case now. :)

  10. JeffM says:

    @chilled: Yes, that will be truly frightening- the amount of money local governments have hauled in from this local real estate bubble and Prop 13 will never be surrendered in the form of spending pullbacks. They’ll probably keep the bureaucrats on the payroll and close parks just like the state did to stick it to the taxpayer. I love CA.

  11. UnnamedUser says:

    Well, well, well. Lessee here.

    30million people in California.
    figger 4 people to the household.
    figger that 60% of households are single family houses.
    figger that 90% of those are debt encumbered.

    30*10**6 * (0.25*0.60*0.9) ~= 4*10**6 mortgages.

    4*10**6/3.17*10**3 ~= .007925 or 0.7% of mortgages are in foreclosure.

    Ho flippin’ Hum! That just ain’t a problem.

    When you cast the numbers as percentage of increase, a function of the first derivative, then it looks horrible. But in absolute terms to the financial institutions, it’s a minor annoyance.

  12. UnnamedUser says:

    uhhhhmmmmm … my previous comment should not suggest that the individuals being foreclosed upon are not distressed. Just that to the mortgage industry this is NBD.

  13. douglips says:

    @UnnamedUser: Using scientific notation in a blog post is a good way to make a typo. 31,676 is 3.1*10^4, though it appears that mistake didn’t factor into your final calculation.

    But think about what you are saying. About 1% of homes are in foreclosure – no big deal.

    How about this: About 1% of homes were foreclosed on LAST QUARTER. If that rate stays constant, about 3% of homes will be foreclosed on in a year. But what if that rate goes up?

    This seems like a pretty big deal to me.

  14. Mr. Gunn says:

    1% wouldn’t be a big deal, if the bank had lent the money out of their own coffers, but they didn’t, they’re all leveraged out too.

    FYI, the banks all knew that if they made more subprime loans, more people would go into default, because they make millions of loans yearly. Saying a given borrower has 5% risk of defaulting is equivalent to saying 5% of borrowers with similar financials WILL default, when you’re dealing with hundreds of thousands of borrowers. Their models predicted that that the increased loan revenue would offset the increase in foreclosures they knew were going to happen when they wrote the loans, but it just goes to show that no matter how good your model is, if you feed it bad data, you’ll get shit results.

    Why should they teach statistics in high school? No one needs to know that stuff, because no American is a statistic!

  15. justbychance says:

    I don’t think the issue is the 1% of homes in foreclosure, but the 99% that could end up that way if people are unable to pay their mortgages.

    Rising electricity, fuel and food costs coupled with the unexpected health problem or job attrition is a dangerous recipe… even for people that are “living within their means.”