Ever since that "So Many More Foreclosures Are Coming" show aired on "60 Minutes," many have been waiting for the foreclosure tsunami to hit. It is, in a way. There's no mention of what types of mortgages these are, but foreclosures in Southern California are up a record amount in the last three months, according to information released yesterday by MD Dataquick. According to the company, 135,431 default notices, the first sign of foreclosure, were sent out from January- to-March. That's an 80 percent from the prior quarter and a 19 percent spike from the same quarter a year ago. Looking at the Los Angeles data, default notices are up 37.6 percent from a year ago. On the other hand, actual foreclosures are down. Here's how the Los Angeles Times interprets the information: They point out that banks and mortgage companies have ceased foreclosure proceedings, while the "soaring default rate could be that some struggling homeowners are purposely skipping their payments so that they can get their loans refinanced, industry experts say." As an example, the Los Angeles Times tracks down Westminster resident Lynne Neagle.
Neagle said she and her husband had trouble paying their mortgage, but their loan servicer ignored their pleas to renegotiate terms -- until they quit paying, that is. Suddenly, she said, they were presented with new ways to lower their payments and are currently negotiating new terms through the Hope Now program set up by the federal government and some of the country's largest mortgage lenders. The paper also interviews an economist who believes that given all the area job losses, more defaults will come. "But foreclosures won't necessarily follow the same trend, experts say, because banks don't want to overtax a housing market already flooded with cut-rate properties repossessed by lenders."
· Golden State Mortgage Defaults Jump to Record High [DataQuick, press release]
· Mortgage defaults rise but homeowners stay put [LA Times]
· "60 Minutes" Report: So Many More Foreclosures Coming [Curbed LA]