The Mercury News recently reported that California’s foreclosures in 2008 shattered the record set in 2007. California saw foreclosures jump 158% over the previous year with almost 250,000 foreclosures occurring. In 2007, there had been 97,000 foreclosures in California. Foreclosures in California represented about $108 billion in outstanding mortgages.
More California Foreclosures in 2009
California’s state government had enacted legislation (SB 1137) to require lenders to give 30 days’ notice to homeowners before beginning the foreclosure process. This had caused a dip in default notices being sent out, but unfortunately, December 2008 saw a big rebound in those numbers. It nearly doubled November default notice numbers by reaching 42,421notices sent out in California. Apparently this delaying maneuver to buy homeowners and the economy time looks to have failed.
Treading Water Not Possible for Many
Here’s how underwater some homeowners are now. According to the founder of ForeclosureRadar, Sean O’Toole, “the average foreclosed property has a market value $180,000 less than the homeowner’s mortgage balance.”
Part of the problem continues to be that with more foreclosures and auctions selling homes off at lower prices, the housing market continues to lose value and jeopardize other homeowners’ properties. However the continued decline in value may be very necessary as I mentioned in the Negative Equity post. Drops in value may well reach 30% before things settle down.
Check out our other posts if foreclosure is closing in on you or if you’re now looking for tips on getting back into the rental market.
