Friday, February 03, 2006

Mortgage delinquencies in California

According to this LA Times article dated February 3, 2006, mortgage delinquencies are increasing in California.

As housing price increases slowed in the last three months of 2005, the number of default notices sent to homeowners in Q4 rose 19% over the number of notices sent out in Q3, and was 15.6% more than the number of notices sent out in Q4 2004. All areas saw a rise in notices, but the counties with the largest percentage increase in notices were Napa, San Luis Obispo, San Francisco, Riverside, Orange, and San Diego.

The article states that only about 5% of homeowners who receive notices end up losing their homes. In rising markets they are often able to avoid foreclosure by selling their properties. The state's home appreciation rate peaked in Q2 2004 and has declined since then, and is expected to decline below 10% this year. The number of homeowners in default has been rising since Q3 2004.

(Things could get ugly real quick if the market deteriorates and delinquent homeowners find themselves unable to sell their properties to avoid foreclosure.)


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