Wednesday, August 02, 2006

Mortgage Defaults Up 109%

"Sacramento and Placer counties were among five California counties in which mortgage defaults more than doubled in the second quarter. Statewide, default notices hit a three-year high, up more than 67 percent compared with the same period last year, a report said Wednesday. There were 20,752 California default notices sent to homeowners between April and June, a 10.5 percent increase from the first three months of this year, San Diego-based DataQuick Information Systems said."

"Last quarter's year-over-year increase was the highest for any quarter since DataQuick began tracking defaults in 1992...Last month San Diego and Sacramento counties saw their median home prices dip about 1 percent compared with a year ago. Second quarter defaults shot up about 99 percent in San Diego County and 109 percent in Sacramento County from last year."

Top 5
Sutter: 229.4%
Placer: 126.2%
Stanislaus: 109.8%
Sacramento: 108.6%
Riverside: 104.0%

**Thursday Update**
From the Sacramento Bee:

"We're seeing more people calling and coming in and wanting to know what to do," said Pam Canada, executive director of Sacramento-based Neighborworks Homeownership Center, which advises people on how to buy homes and stay in them. "They're in over their heads basically and can't be bailed out with refinancing. The real heartbreaking part is there's not a lot of solutions."

Many have mortgages that represent more than 100 percent of their home's value, she said. Others face rising monthly payments with adjustable-rate mortgages and don't have enough equity in the home that would allow them to move to a different mortgage, Canada said...

In a statement, DataQuick President Marshall Prentice said, "This is an important trend to watch, but it doesn't strike us as ominous." Prentice said defaults would have to "roughly double from today's level before they would begin to impact home values much."

But some local mortgage officials expect to see more notices in months ahead. "If we start seeing a leveling off in the market and properties start to dip, that's where you're going to see the trouble begin," John Arvanitis, president of Citrus Heights-based Sunrise Vista Mortgage Corp., said. "They aren't going to be able to get out..."

Placer County, with 276 notices in the second quarter, was up 126.2 percent from the same period in 2005. That figure, up from 239 during the first quarter, was the highest since 1998. Placer County's record is 322 notices in 1996.

Sacramento County recorded 1,352 notices of default during the second quarter of 2006, up 108.6 percent from 2005. The second-quarter number rose from 1,136 in the first quarter and was the highest since 2001. The county's record is 2,441 in 1997.


Anonymous said...

Not really news to those following the bubble. Defaults are a given when you combine 17 rate hikes with zero down, 1% adjustables, and negative amorts written over the last couple of years. Homeowners aren't as able to walk away from these mortgages with the new bankruptcy laws in place so they are likely to try and sell quickly to prevent foreclosure. The banks will get a per centage of these homes back and they will hit the market at distressed pricing levels. One thing is likely...inventory levels are going to continue to rise with pricing pressure to the downside.

Lander said...

LA Times:

"In counties that had more than 100 default notices in the second quarter, the biggest percentage increase was in Placer County, near Sacramento, where they rose 126%, DataQuick said."

"It's probably not a coincidence that Placer ranked at the top of another list: Median home prices fell more there over the last year than in any other county. The drop from June 2005 to June 2006 was 7.6%, DataQuick said."

Anonymous said...

"Sacramento County recorded 1,352 notices of default during the second quarter of 2006, up 108.6 percent from 2005. The second-quarter number rose from 1,136 in the first quarter and was the highest since 2001. The county's record is 2,441 in 1997."

Over half way to a new record here and defaults are just beginning to build momentum. The real fallout probably hits sometime in early to mid '07.

Anonymous said...

marhall prentiss is a liar or a is august 2nd,and the very first wave of mortgage resets started in june.we have 2 full years to go,and i would be very surprised indeed if the record number of defaults isn't shattered wthin a year.

rocklin renter said...

So, who else can't wait until the mortgage brokers/lenders/banks/et al start getting sued?!?!? LOL

Anonymous said...

In the back of my mind I keep thinking of the S&L bailout....I hate to see people lose their houses, but sometimes lessons have to be learned.

Anonymous said...

Anyone taking bets on where prices will end up over the next two years? A recent post said homes are overvalued by over 50%. With rising commodity cost for copper, lumber, etc. its probably not 50% but imho its somewhere close to this number.The patient ones will be rewarded here. Don't jump in too soon.

Elk Grove Housing Bubble said...

How many in Elk Grove home of the housing bubble.