Mortgage Situation Worsens in California

[May 9, 2008.]

 

Financial statistics for the first quarter of 2008 reveal that the state of California has suffered setbacks in the mortgage market. This information is far from novel for those who have been working with real estate loans in the Golden State.

Throughout January, February, and March of 2008, a total of 47,171 foreclosures took place in the state of California. This figure represents a record-breaking amount of foreclosures.  DataQuick Information Systems, a company that keeps track of information in the real estate market, stated that the amount of foreclosures in the state of California this quarter is four times as high as the amount of foreclosures that took place in California during the same time last year.

Additionally, DataQuick Information Systems reports that 110,000 default notices have been sent out to California banks and other lenders during the months of January, February, and March of 2008. The staggering height of this number is reflected in the fact that it represents 1.4% of all homeowners in California. It is 1.43 times the amount of default notices sent out during the same period in 2007, according to DataQuick Information Systems.

The real estate tracking company states that the high number of default notices is an especially troubling sign for California's housing market. Why? Company projections indicate that 68% of home buyers who have defaulted on their loans even once will eventually have to foreclose their homes.

During the same period in 2007, that percentage was considerably lower.  Only 48% of homeowners who defaulted on their loans during the first quarter of 2007 have had to foreclose. This figure reflects a grimmer overall economic situation during the year of 2008. Many of the homeowners who have defaulted on payments this economic quarter have done so because they are already overburdened with other debts.