Approaching Meltdown – The number of homeowners going into repossession increased over the last three months to its highest level in more than 15 years. Figures released by DataQuick, show the number of defaults rising and is the highest ever recorded since 1992.
Approaching Meltdown – Lending institutions sent homeowners 113,676 default notices during the January to March 2008 period. This is an increase of 39.4 per cent from 81,550 the previous quarter and up 143.1 per cent from 46,760 for the first quarter of 2007. These figures are the highest throughout United States. Most of the loans that went into default in the last months were originated between August 2005 and October 2006.
Californian home owners were on average five months behind on their mortgage payments on an average mortgage of $346,750. On home secured loans and other lines of credit, they were eight months behind on their payments, owing an average $3,512.
Marshall Pretence, President at DataQuick said, “The main factor behind this foreclosure surge remains the decline in home values. Additionally a lot of the ‘loans-gone-wild’ activity happened in late 2005 and 2006 and that is working its way through the system. The big ‘if’ right now is whether or not the economy is in recession. If it is, the foreclosure problem could spread beyond the current categories of ‘dicey’ mortgages, and into mainstream home loans.”
Repossession auctions have emerged as a significant market facto accounting for 33.1 per cent of all California housing activity. A year ago auction activity was only 3.2 per cent. This activity now varies significantly by area, from 5.1 per cent in San Francisco County to 66.7 per cent in San Joaquin County.
In the words of former UK Prime Minister, Margaret Thatcher “Tough times never last, but tough people do” is the only words of comfort that can be passed onto those
Thousands of lives caught up directly and in-directly by the credit crunch.