County Reports Sharp Drop in Default Notices
Ventura County had Southern California’s steepest decrease in home foreclosure proceedings during 1994, a real estate information service reports.
Lenders served default notices on 2,549 homeowners last year, down almost 18% from 3,105 in 1993, according to Dataquick Information Systems.
Serving of a default notice is the first step in a foreclosure proceeding.
Most Southern California counties showed declines in such proceedings last year, but Ventura County had the best record by far. Its year-to-year decrease compared with a decline of less than 5% for the region as a whole.
Los Angeles County had 7% fewer foreclosure notices filed in 1994 than in 1993.
In contrast, Santa Barbara County showed an increase of nearly 5%. Statewide, such proceedings last year increased less than 1%.
The report includes all but the final week of 1994. It is unlikely that activity in the last week of the year affected the trend, Dataquick said.
Foreclosure activity is a lagging economic indicator since it reflects financial problems experienced by homeowners before the actions were begun, noted Donald L. Cohn, Dataquick’s chief executive. “We’re looking at year-old distress here. We expect foreclosure activity to decline somewhat in 1995.”
Homeowners are generally eight to 10 months behind in their payments when lenders start proceedings, Cohn noted.
Most of the houses and condominiums that go into default are subsequently lost by their owners. In many cases, the property doesn’t go through the entire process.
The home may be sold for less than the amount owed on the remaining mortgage, called a short sale. Sometimes the property is simply deeded to the lending institution that holds the mortgage.
Despite an improvement in Southern California, foreclosure remains a problem in all housing categories and in most communities, Dataquick said.
Most foreclosed homes are middle-of-the-road three-bedroom, two-bathroom houses that were purchased five years ago when prices were near or at their peak. Their original purchase prices ranged on average from $175,000 to $250,000.
