California defaults soar in 4Q

Source: Business Week

The number of California homeowners who fell behind on their mortgage payments surged in the fourth quarter of 2007 to a 15-year high, heightening the possibility of a jump in foreclosures, a real estate research firm said Tuesday.

A total of 81,550 default notices were sent to homeowners statewide between October and December, up 12.4 percent from the previous quarter and an increase of more than 114 percent versus the same quarter in 2006, according to DataQuick Information Systems.

Last quarter's tally of default notices is the highest recorded by DataQuick, whose records go back to 1992.

In addition, 31,676 homes ended up in foreclosure during the quarter, up 30.8 percent since the third quarter and a 421.2 percent jump from 6,078 foreclosures in the prior-year period, the firm said.

Read more: http://www.businessweek.com/ap/financialnews/D8UB48M81.htm

In Sonoma County, where the median home price reached over 600K, the banks were giving out jumbo loans like they were Xmas calendars. In many cases, the buyers put little or no money down, so the banks are foreclosing on overpriced homes that have to be marked down substantially to sell. The worst example I've seen is a property that sold in 2006 for 1.995 Million, and is now in default with an outstanding loan balance of 1.8 Million dollars. Fraud anyone?

The realtors in my area like to leave postcards on the front door when a property is being sold. One of the houses, less than 1/4 mile down the street from me, was listed at $605K. These are OLD homes (mine's 52 years old) in a "not bad, but not great working class neighborhood. I'm not sure of the average square footage, but I know it's smaller than the 1450 sq. ft. townhome I moved out of in August. It has 3 bedrooms, a small bath (as many of the older homes do), a living room, kitchen, and one-car garage with a pretty nice front and back yard. Most of the houses on my street are similar.

The house down the street stayed on the market for a month and was sold at 100K less than the asking price...and this was back in September, right after I moved into the neighborhood.

Silicon Valley became ridiculous...I think the peak median home price hit $750K.

It's no longer a seller's market, and in my mind, that's a good thing.

:patriot:

Does the post card include postage? Or is a first class stamp required to walk away?

I was driving down a street and i saw about 1/3 of the houses had for sale signs.

a friend gave me some advice that it was a good time to buy. I live in San Francisco and I also, I love Sonoma County; and, of course, the prices were through the roof. Knowing history, I expected a crash and joked that I was going to wait until bubble burst and cash in on people's misery. Now? Now, it's not so funny. And it is going to get worse.