California home foreclosures climb as risky loans sour (AP)

Tuesday April 22, 5:40 pm ET
By Elliot Spagat, AP Business Writer

California home foreclosures climb, accounting for 1 of 3 homes sold

SAN DIEGO (AP) -- Foreclosure proceedingsagainst California homeowners jumped by more than 140 percent in thefirst quarter compared to a year ago, the result of risky loans duringboom times, a real estate research firm said Tuesday.

Mostloans that went into default originated between August 2005 and October2006, according to DataQuick Information Systems, which said the marketwas shaking off its "'loans-gone-wild' activity" during that time.

The median age of a defaulted loan was 23 months.

Lenderssent homeowners 113,676 default notices from January through March, up143.1 percent from 46,760 during the same period of 2007 and up 39.4percent from 81,550 during the last three months of 2007.

The first quarter numbers marked the highest foreclosure level since DataQuick began keeping track in 1992.

Defaultnotices hit their highest levels in nearly all of California's 58counties, but Los Angeles County was just shy of its peak in the firstquarter of 1996, DataQuick said.

One of every three resale homessold in California from January through March had been foreclosed atsome point during the previous year, up from 3.2 percent a yearearlier, DataQuick said.

In San Joaquin County, foreclosuresaccounted for two of every three homes that were resold. In SanFrancisco County, they made up only 5.1 percent.

Mortgages weremost likely to go into default in the central California counties ofSan Joaquin, Merced and Stanislaus, DataQuick said. They were leastlikely to go into default in the San Francisco Bay area counties of SanFrancisco, Marin and San Mateo.

Many homes were financed withmultiple loans. As a result, the 113,676 default notices sent in thefirst quarter were recorded on 110,392 residences.

Default notices mark the first step in the foreclosure process.

Trusteedeeds -- which represent loss of a home to foreclosure -- totaled47,171 during the first quarter, up 327.6 percent from 11,032 duringthe same period of 2007 and up 48.9 percent from 31,676 during theprevious three months.

It marked the highest level of trusteedeeds since DataQuick began keeping track in 1998 and was more threetriple the number during the nadir of the previous cycle in 1996.