Calif. Foreclosures Reach Highest Level in Fifteen Years

The number of mortgage default notices filed against California homeowners jumped to its highest level in more than fifteen years during the fourth quarter of 2007, a real estate information service reported Tuesday.

Lending institutions sent homeowners 81,550 default notices during the October-to-December period. That was up by 12.4 percent from 72,571 the previous quarter, and up 114.6 percent from 37,994 for fourth-quarter 2006, according to DataQuick Information Systems.

Last quarter’s number of defaults was the highest ever recorded by the real estate information provider, who maintains stats going back to 1992.

“Foreclosure activity is closely tied to a decline in home values. With today’s depreciation, an increasing number of homeowners find themselves owing more on a property than it’s market value, setting the stage for default if there is mortgage payment shock, a job loss or the owner needs to move,” said Marshall Prentice, DataQuick’s president.

DataQuick reported that most of the loans that went into default last quarter were originated between August 2005 and October 2006, while the median age of a defaulted mortgage was was 22 months, up from 15 months one year earlier.

On primary mortgages statewide, homeowners were a median five months behind on their payments when the lender started the default process, DataQuick said. The borrowers owed a median $11,121 on a median $340,000 mortgage.

On lines of credit, homeowners were a median seven months behind on their payments. Borrowers owed a median $3,379 on a median $56,000 credit line, although the amount of credit actually in use is unknown from an analysis of public records.

Southern California saw the most new foreclosures of any region in the state, registering nearly a 100 percent increase in NOD activity during the fourth quarter relative to one year earlier. Orange County saw NOD activity surge nearly 116 percent, DataQuick said.

Trustees Deeds recorded in California — that’s the actual loss of a home to foreclosure — totaled 31,676 during the fourth quarter, the highest on record.

Last quarter’s total rose 30.8 percent from 24,209 in the previous quarter, and jumped a stunning 421.2 percent from 6,078 in the fourth quarter of 2006. In the last real estate cycle, Trustees Deeds peaked at 15,418 in third-quarter 1996.

I’m starting to sound like a broken record: we’re in uncharted territory.

(H/T: the Calculated Risk blog, who has some scary charts worth reading)