San Diego Mortgage Defaults Soaring
Homeowners in San Diego County are defaulting on their loans and losing their properties to foreclosure at an increasingly rapid pace, the San Diego Union-Tribune reports today.
However, this shattering new trend remains far less extensive here than the mortgage problems arising elsewhere in the nation.
In the first two months of the year, there were four times more default notices issued in the county than in the first two months of last year, while foreclosure rates tripled over the same period.
A default notice, often sent by lenders after three consecutive months of home loan nonpayment, is the first step toward foreclosure.
Much of the hardship is focused on South County communities and involve people carrying subprime California home loan products, in which buyers with blemished credit took out mortgages that reset to higher levels in as little as 1-2 years.
San Diego County placed 17th among the state’s 58 counties, with a default rate of 3.3 per 1,000 homes, compared with 6.9 in top-ranked San Joaquin County. Yet as bad as this California mortgage trend may seem, the problem is nowhere near the crisis levels seen elsewhere in the nation.
Nationally, the county’s default rate placed 203rd out of 332 markets surveyed, according to mortgage tracking company LoanPerformance.
The accelerating San Diego County default and foreclosure numbers also pale by comparison to the number of California mortgage loan transactions and homes sold.
For the first two months of the year, newly filed defaults and completed foreclosures in San Diego County totaled 3,272, while loans originated and sales closed totaled 33,801, DataQuick figures show.
“We couldn’t find anywhere where we detected that the presence of default properties brought price levels down,” said analyst John Karevoll. “We expect that to happen in a few areas this spring and summer, but not by much.”
As bleak as it is for the 2,525 San Diego County homeowners who received default notices and the 747 whose homes were foreclosed on in January and February, the trouble is much worse in the Midwest.
“It’s disconcerting,” said Bob Visini, spokesman for LoanPerformance, a San Francisco-based subsidiary of First American Real Estate Solutions. “Everything seemed to be going well and then six months into 2006, we already saw the warning signs.”
At the end of last year, Visini said, 9.6 percent of all outstanding home mortgage loans in San Diego County were subprime and of those, 11.3 percent of owners were at least 60 days late in making payments.
ARTICLE & GRAPHIC SOURCE: San Diego Union Tribune.
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