San Diego Mortgage Troubles Grow
California mortgage lenders repossessed a record number of San Diego County homes in March, bolstering fears that the area housing slump is worsening, according to the Voice of San Diego.
The 433 homes lost in foreclosure represented a more-than six-fold increase over the previous March, when there were only 66 such repossessions, according to La Jolla-based DataQuick Information Systems.
The previous record was 389 homes in October 1996.
The month’s California home loan foreclosure rate mirrored the statistics for the entire first quarter of the year: A record 1,183 homes were lost in foreclosure in the first three months of 2007, edging past the previous peak of 1,059 in the third quarter of 1996.
As the group of homeowners in foreclosure swells, so certainly does the group of those stretching to make their home mortgage payments.
The dramatic foreclosure rate could be the tip of an iceberg, but it hasn’t yet had a dramatic, wide-scale effect on the housing market throughout the county.
“It’s terrible being in this situation, and you can’t discount that,” said John Karevoll, an analyst with DataQuick. “But we’re asking, ‘How is this impacting the real estate market? How much of a discount are these foreclosure properties selling for?’ So far, the answer is, ‘Not much.’”
Compared to cities in Ohio and Michigan, where monumental job losses have exacerbated the foreclosure rate and pushed it into the tens of thousands, San Diego’s numbers pale.
The state’s long, dramatic period of housing appreciation meant that the California mortgage loan foreclosure rate plummeted near the start of the decade. But these new numbers are clear: That is over.
Local real estate analyst Gary London said the foreclosure rate could soar higher if the San Diego mortgage problems seen lately continue to amass.
The 433 homes lost in March represent a fraction of the tens of thousands of transactions conducted in the county each month, London said.
The more telling trend is cloaked, he said - the thousands of county homeowners who are just barely making their payments, or borrowing from elsewhere to keep up with their mortgages.
“If there’s not a housing turnaround later on this year, we could start seeing real numbers that are really meaningful, representing real distress,” he said. “If the housing market doesn’t improve in the foreseeable future, the situation could get substantially more dire.”
Already in distress are thousands of San Diego County homeowners who borrowed enthusiastically when home values were skyrocketing.
Many who took out loans with low introductory rates saw a safety net in the promise of mortgage refinancing or selling if money ran short for monthly payments.
But as prices slip, that safety net vanishes, and many homeowners are now stuck with soaring monthly payments for a mortgage whose terms they never really understood.
Continue reading this article by the Voice of San Diego …