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The rise in number of home loan defaults in California in June is expected to put more properties into foreclosed homes listings across the state, based on an analysis of state foreclosure data.

The percentage of delinquent mortgages in California has increased to about 10 percent of all mortgage loans, which means that one homeowner out of all homeowners with home loans across the state has missed monthly loan payments and has received a notice of delinquency.

In Los Angeles County, the percentage of borrowers in default is the same as that of the state, which is around 10 percent.

Notices of default are the first notices sent to homeowners when they miss their loan payments. This notice also marks the first stage of the legal foreclosure process.

Last June, the percentage of delinquent mortgage borrowers in Los Angeles increased to 9.9 percent of all homeowners with home loans, an increase from 9.5 percent in May. The default rate also marked a nearly two-fold increase from the 5.2 percent delinquency level in June last year.

Across California, 9.5 percent of all homeowners with mortgages were delinquent in June, an increase from the 9.2-percent level in May and a substantial increase from the 5.8-percent delinquency level in June last year.

What decreased in California and in Los Angeles County in June were completed foreclosures and the number of properties entering banks and lenders? foreclosed homes listings. In June, the repossession rate in Los Angeles County was 0.9 percent of all mortgage loans, a drop from the 1.2-percent level in June last year.

Across the state, the lender repossession rate was 1 percent, a drop from the 1.6-percent level in June last year.
Clearly, completed foreclosures and repossessions were lagging delinquencies.

Analysts say many banks are controlling their foreclosed homes listings to prevent sharp declines in home prices. Putting hundreds or thousands of their foreclosure properties in one batch would push down home prices to their lowest levels and would cause more bank losses.

Other banks say foreclosures are not yet showing in their foreclosures homes because they are complying with moratoriums imposed by federal and state governments. Many also say they are waiting for revisions in foreclosure prevention programs implemented by the federal government.

All the same, according to housing analysts, with the rising default rates across California, more residential properties are expected to enter foreclosed homes listings in the coming months.

Foreclosure listing sales are increasing in affluent places in San Diego County such as Solana Beach, Rancho Santa Fe, Carmel Valley, La Jolla, Del Mar and Point Loma and other central San Diego gated neighborhoods, as shown in reports of San Diego County foreclosure listings in May.

During the first year of the housing crisis, foreclosure inventories were overloaded with homes located in low-income neighborhoods as these where subprime borrowers lived.

But the persistence of the worldwide recession extended the arms of foreclosures into the enclaves of the rich, as stock markets, financial multinationals and non-housing industries also collapsed. Even executives who were well-ensconced in their positions were affected by layoffs.

Previously, gated neighborhoods and more affluent communities were thought to be immune from foreclosure actions because people who lived in these areas obtained prime loans and had higher-income occupations and businesses.

In May, there were nearly 1,000 foreclosure listing homes sold, an increase of over 9 percent from sales in April, but represented a 36.7 percent decrease from sales in May 2008. There were 3,059 default notices, a 9.3 percent decline from April and a 2.5 percent drop from May 2008.

In May, sales of foreclosure homes in several affluent areas reached record levels.

In the Carmel Valley area, where most homes are priced around $676,500, a total of 44 default notices were sent to homeowners in May, an increase from the 14 notices sent in May 2008.

In the affluent coastal community of Del Mar, sales of foreclosure homes totaled 54 units.

For many months, affluent homeowners use their resources to withstand the effects of the foreclosure crisis, but as the recession persisted and worsened, their investments and income-producing businesses faltered.

Real estate analysts contend that foreclosure listing prices of houses in affluent neighborhoods will increase the level of median home prices in San Diego, even if the higher-priced homes are sold at a discount because of their rising sales pace.

In the neighborhood of Kensington-Normal Heights, out of 43 homes sold in May, 29 units were foreclosure listing sales. The median price was $304,000 a 17 percent decline from the price in May 2008.

In Hillcrest-Mission Hills, where most homes are priced around $416,000, out of the 39 home sales in May, 21 were foreclosure listing sales.

Housing analysts said that the major factors for the rise in foreclosure listing sales in more affluent areas are the loss of high-income jobs, collapse of businesses and the difficulty of getting jumbo home loans.

California still leads other states in foreclosed home listings, based on foreclosure data released by California-based real estate research firm RealtyTrac.

In May, California had 92,249 housing units hit with foreclosure filings, the highest figure among state foreclosures. The number represented an almost 23 percent increase from filings in May 2008.

The number of bank repossessions declined by 1 percent compared to April while defaults dropped by 18 percent. However, the number of auctions scheduled to sell properties in foreclosed home listings increased by 18 percent.

Marty Rodriguez, founder of Glendora-based broker Century 21 Marty Rodriguez, said she and her fellow brokers are still waiting for bank owned foreclosed properties that were not released before the foreclosure moratoriums. She said brokers received insider information that there are more bank owned homes still to enter the market.

Rodriguez said many homeowners who applied for loan modification during the foreclosure moratoriums failed to qualify, causing more properties to be added to foreclosed home listings.

Rodriguez also added that she has been receiving multiple offers on bank owned real estate owned properties because banks have priced them aggressively to get more offers. She said many of the offers have been exceeding the asking price because of the competition.

The over 92,000 foreclosure filings in California as reported by RealtyTrac included all filings in different stages of foreclosure: default, auction and real estate owned. The notice of default is given when the initial foreclosure is filed. The notice of auction is given when a trustee or foreclosure sale is scheduled. Properties are considered REO when they are foreclosed and repurchased by the bank.

The second state with the biggest number of foreclosure notices is Florida. Despite a decline in default notices, foreclosure auctions and bank owned foreclosed home listings compared to April, foreclosure filings increased by 50 percent to 58,931 units compared to filings in May 2008.

With 17,157 in foreclosure filings, Nevada ranked third among the states, according to the RealtyTrac report.

Rodriguez related that first-time buyers have been joining the frenzy in looking for bargain-priced units in foreclosed home listings. They are trying to beat the deadline for the $8,000 tax credit which is offered only up to the end of November.

With first-time buyers and investors competing in many markets, the asking prices for some properties in foreclosed home listings go up instead of going down. Rodriguez cited a Corona home which was offered at $507,000 and which was finally sold at $590,000, still a bargain when the original price of $860,000 is considered.

Foreclosures mean misfortune for thousands of homeowners. But some get creative and tried to make something positive out of the crisis.

In an effort to help control the rising number of foreclosures homes statewide, California Attorney General Jerry Brown has released an order requiring all foreclosure prevention counselors and consultants to register with his state office starting July 1.

A law granting a 90-day foreclosure moratorium has been signed by California Governor Arnold Schwarzenegger.

According to MDA DataQuick, 52.1% of all home sales in San Diego last month are foreclosures. Compared to the previous years? records, median home prices now are very low at $305,000, from its peak of $517,000 in November 2005.

California Governor Arnold Schwarzenegger has introduced a 90-day foreclosure moratorium. He called on for the implementation of the moratorium unless the banking industry can offer a comprehensive program to modify home loans that are on default.

California foreclosures are still on the rise despite pressures exerted by government officials on mortgage companies to help families with troubled mortgages. In a survey conducted by the nonprofit group California Reinvestment Coalition last April, homeowners who sought help from mortgage counselors still ended up in foreclosures.
The data was taken from mortgage counselors coming [...]

The Democrats? proposal is longer than the 90-day moratorium that California Governor Arnold Schwarzenegger is proposing. Both proposals will be tackled during a special session called by Schwarzenegger to discuss California?s budget shortfall which increased to $11 billion due to declining revenues amid the housing and financial crisis.