Home Mortgage Crisis Worsens, Notices, Foreclosures Skyrocket

February 25, 2008 - Notices of Default and Notices of Trustee’s Sale skyrocketed in San Diego County last month, according to several foreclosure reports released this month.

According to Mount Pleasant, Pa.-based Default Research Inc., San Diego had 6,003 Notices of Default and Notices of Trustee’s Sale in January compared to just 2,997 a month earlier and only 1,723 in January 2007.

And if this month’s statistics were not astonishing enough, Default Research forecasts that foreclosures will continue to rise as more adjustable rate mortgages reset and an increasing number of households cannot afford their monthly mortgage payments.

With a minimum of four months between the recording of a Notice of Default and the property being sold at auction, the recent increases in defaults clearly indicate that auction sales are likely to also increase further in the upcoming months, according to ForeclosureRadar, another research company that closely tracks the foreclosure market.

In a Feb. 12 report, ForeclosureRadar said that by comparing January foreclosure sales to defaults four months ago, it appears that as many as 80 percent of defaulting homeowners may now lose their homes at auction.

“The auction sales are a far more accurate indicator of the foreclosure problem,” said Sean O’Toole, founder of ForeclosureRadar, in the report. “While certainly more homeowners are getting into trouble, the far larger issue is that fewer homeowners are able to get out of foreclosure than ever before.”

Sold At Foreclosure

ForeclosureRadar reported that the number of California properties sold at foreclosure increased 55 percent with a combined loan value of $8.06 billion. The Discovery Bay research outfit said properties sold at foreclosure increased 454 percent from the same period a year ago.

In San Diego County, ForeclosureRadar reported 3,282 Notices of Default in January, 1,834 Notices of Trustee’s Sale and 1,612 properties sold at foreclosure auctions. The report indicates a 47 percent increase in total pre-foreclosures and foreclosures from December 2007 and a 343 percent increase from January 2007.

By comparison, Riverside County saw 5,372 Notices of Default in January and 2,858 Notices of Trustee’s Sale, and 2,813 foreclosure sales at auction.

Foreclosures are up in nearly every county and O’Toole said homeowners are not the only ones feeling pressure.

He said that in January, 98 percent of auction sales went back to the lender after receiving no bids.

Of the 19,821 foreclosure properties sold at auction in the state, 13,950 were discounted with an average opening bid at 16 percent lower than the remaining mortgage amount, and of those, 4,624 were discounted 30 percent or more.

Home Mortgage Crisis Worsens, Notices, Foreclosures Skyrocket
By MICHELLE MOWAD | San Diego Business Journal