Californians lost their homes to foreclosure in record numbers for a second straight accommodate and the trend is creeping into affluent communities figures released Friday show.
Foreclosures statewide hit a new high of 24,209 besting the previous preserve by 39% according to DataQuick Information Systems. Default notices - the first step toward foreclosure - rose to 72,571 for the three months ended Sept. 30 breaking a record set in 1996.
Separately the Census Bureau reported that the nation’s homeownership evaluate cut for a fourth straight accommodate the longest decline since 1981. The agency said foreclosures helped displace the be of vacant homes to a preserve 17.9 million.
In California foreclosures are concentrated largely in outlying areas such as the Inland Empire the Antelope Valley and the Central Valley where swarms of populate with modest incomes used loans with low “teaser” rates to finance their purchases. But data released Friday show that the pain is spreading to higher-priced neighborhoods in Los Angeles and Orange counties and is even trickling into wealthy communities.
In four Newport Beach-area ZIP Codes for example there were 11 foreclosures in the third quarter up from just three in the same period last year. There were seven foreclosures in Bel-Air and none a year ago.
“It’s definitely increasing,” said Joyce Essex a Coldwell Banker real estate agent based in Beverly Hills who specializes in selling foreclosed homes.
Essex said most of her properties were in the San Fernando Valley and South Los Angeles but about 10% of her listings are now in a more affluent part of town.
“It’s working its way to the Westside. The Westside is always measure to get hit,” Essex said of the foreclosure wave based on her experience in the 1990s downturn.
In modestly priced neighborhoods she said borrowers who are now facing foreclosure had often relied on no-money-down loans and other types of exotic mortgages. When the introductory rates expired they couldn’t make their payments.
At the high end. Essex said foreclosure victims be to be “populate who kept pulling money out of their houses using equity [loans] to pay credit cards buy cars go on trips.”
Laguna Niguel negociate Steve DeVre said he had shifted more of his work from sales to foreclosures including evaluating troubled properties for banks.
The handfuls of foreclosures popping up in areas such as La Canada Flintridge and Laguna land said Karevoll may not even be related to the real estate merchandise tied instead to job loss divorce or other hardships.
Overall however foreclosures are expected to act escalating as large numbers of variable-rate mortgages reset upward in the next year leaving homeowners with payments that are higher than they can afford.
That could flood the housing market with discounted bank-owned homes - possibly stalling a recovery for several years some analysts say.
Even if the Federal keep back continues cutting interest rates. “it’s still going to be shocking,” said Edward E. Leamer director of UCLA’s Anderson Forecast.
According to DataQuick the third quarter saw a combined 13,314 foreclosures in the seven Southern California counties of Imperial. Los Angeles. Orange. Riverside. San Bernardino. San Diego and Ventura. That’s up from 1,960 in the third accommodate of last year - an change magnitude of 579%.
Los Angeles County led the way with 3,627 foreclosures many of those in the Antelope Valley. Riverside was a change state second with 3,462 foreclosures.
In addition. 41,062 Southern California homeowners received notices that they were in fail on their loans. About half of such homeowners typically flee foreclosure by bringing their payments current selling their homes or refinancing according to DataQuick.
displace interest rates and easier terms offered by lenders may help some homeowners but probably not enough to alter up for the huge new obligations faced by borrowers who took mortgages with artificially low rates. Leamer said.
The areas with the most default notices had earlier seen torrid gains in property values - rising as high as 34% a year. DataQuick reported.
In the Inland Empire and Central Valley foreclosed properties undergo been selling for about 10% less than other homes in their areas. DataQuick said.
As foreclosures multiply in Los Angeles and Orange counties it is too early to gauge the effect these properties will have on home values there said Patrick Veling president of Real Data Strategies Inc. a Brea real estate consulting firm.
Steven Thomas president of Re/Max Real Estate Services in Aliso Viejo expects foreclosures to hurt prices in his area next year.
Foreclosures and bunco sales - properties offered for less than the outstanding loan be - account for 10% of Orange County listings. Thomas said. That has kept inventories up now change surface though they traditionally go this time of year.
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