Home Foreclosures on the Rise Again in California

After a year in which property repossessions in California showed signs of stabilization, foreclosures have started to rise, raising concern about the prospects of the state’s budding real estate recovery, according to TRW REDI Property Data, a real estate information company based in Anaheim.

Foreclosures are up by 16%, from 23,700 last year to 27,500 this year, between January and April.

Last year was the first since 1990 that foreclosures in many parts of the state stabilized. As the state began to pull itself out of the economic recession of the early 1990s, real estate foreclosures declined in tandem, TRW REDI said.

The recent rise in property repossessions is thought to be emanating from lenders shortening the default to final foreclosure process and, perhaps more importantly, high mortgage default rates evidenced in 1995. California mortgages that were 90 days or more delinquent increased by 3.3% during 1995, TRW REDI said.

“While this recent rise in foreclosures pales in comparison to the situation we had in the early 1990s, there is concern that further increases will have a generally adverse impact on home values,” said Nima Nattagh, TRW REDI’s market analyst. Foreclosed properties are typically disposed of by lenders at deep discounts.