California Foreclosure Notices Spread Like Wildfire

April 30th, 2008

Across California the foreclosure notices spread like wildfire wreaking havoc during the first quarter of the current year. The worst affected counties were Colusa, Sutter and Yuba. For California it was the highest record in the last 15 years. Across the state the default notices increased by 143.1% during the first three months of 2008 in comparison to what it was a year ago during the same period. The notices dispatched by the lending bodies, this being the first step in the foreclosure judicial process, numbered 113,676.

Yuba County topped the list with 357 notices showing an increase of 136.4%. Colusa and Sutter have not performed as badly. In some counties the numbers are running into thousands. But Colusa and Sutter seem to be catching up with default notices quadrupling in Colusa and zooming by 195.6% in Sutter. A real estate agent, Kory Hamman opines that the trend is ominous. There seems to be no signs of a slow down.

The blame for the falling house prices is being placed on the sub-prime mortgages. Most of those now getting into default stems from this category and were contracted between August 2005 and October 2006. It is now seeping into the system causing extensive damages. Many of the loans had ‘gone wild’. What is haunting analysts is whether the economy has slipped into recession or not. If the answer is in the affirmative then a falling economy will add to an increase in number of people who will fail to meet their mortgage commitments. Soon the conventional and traditional loans will also be affected by the foreclosure virus.

Another trouble point is the rise in gas prices. This is making more people look for housing near to their place of work. They are honing in on Sacramento. In general the apprehension amongst experts is that the situation is going to get worse before it begins to look up. The workshops are doing their part in helping to keep people stay in the houses that are their homes but in proportion to the magnitude of the crisis the help is insufficient. The workshop mood has just started to catch on.

According to DataQuick 47,171 foreclosures were posted in California – the highest since the firm started keeping records from 1988. Of these a third managed to become current even after initial hiccups. This includes those who sell off the houses.