by Calculated Risk on 5/03/2006 01:45:00 AM

DataQuick reports: California Foreclosure Activity Up

First-quarter foreclosure activity in California increased to the highest level in more than two years, the result of slower home price increases, a real estate information service reported.

Lending institutions sent 18,668 default notices to California homeowners during the January-to-March period.
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Foreclosure activity hit a low during the third quarter of 2004 when 12,145 default notices were recorded. Defaults peaked in 1996's first quarter at 59,897. DataQuick's default statistics go back to 1992.

"A number of factors are driving defaults higher," said Marshall Prentice, DataQuick's president. "The main one right now is that home values are rising more slowly than they have been the past couple of years, which makes it more difficult for homeowners to sell their homes and pay off the lender. Other factors that influence default activity include the amount of equity people have in their property, the type of mortgage they used and how long they've had that mortgage."
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Only about five percent of homeowners who find themselves in default actually lose their homes to foreclosure. Most are able to stop the foreclosure process by bringing their mortgage payments current, or by selling their home and paying the home loan(s) off.

Foreclosure activity is still low, but rising.