California foreclosure crisis ‘still deepening’

This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.

A couple of reports today on foreclosures, both indicating the problem continues to grow in California.

ForeclosureRadar reports California’s foreclosure crisis is ‘still deepening’ and ‘accelerating,’ with a record 42,704 Notices of Default issued in March, an increase of 14% from February levels. Though not all defaults lead to foreclosure, the increase could lead to a record flood of foreclosures hitting the market later this year.

RealtyTrac shows a slightly lower level of NODs in California in March -- 40,761 -- but also shows increased overall pre-foreclosure and foreclosure filings in California -- up 20.6% from February levels and 105% from year-ago levels.

Surprising quote from ForeclosureRadar founder Sean O’Toole: ‘We see the housing pain in California continuing through the end of this year, as the market shakes off the effects of the credit mess and rampant overbuilding. As devastating as this may be, we do think that the end result -- greater affordability for the average Californian, using conventional loan products -- will benefit consumers and the housing industry alike.’

Bloviation: O’Toole has been an interesting analyst in this crisis, often pointing to two trends underlying the foreclosure crisis: rampant overbuilding in central California, and no-money-down home financing that stretched the definition of ‘homeowner’ to include borrowers who never made an investment in their home.

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.
Photo Credit: AP