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A great article by Emmet Pierce (Contact) Union-Tribune Staff Writer
2:00 a.m. March 21, 2009
County foreclosures up 11% over January
Foreclosures in San Diego County increased 11 percent last month, signaling a return to business as usual after a self-imposed slowdown by the mortgage industry.
The MDA DataQuick research firm yesterday reported 1,232 foreclosures in February, an 11 percent jump over January, but a decline of 6.4 percent from February 2008.
"I think there is a backlog of foreclosures that have been delayed by the legislative process and what amounted to an industrywide moratorium for a couple of months," said Rick Sharga, senior vice president of the RealtyTrac research firm. "The level of foreclosure activity is increasing."
DataQuick also said there were 3,471 notices of default, which mark the start of the foreclosure process. That is the most since the firm began collecting data on such notices in 1992. It marked an increase of nearly 24 percent over January and an increase of 17 percent over February 2008.
Dustin Hobbs, spokesman for California Mortgage Bankers Association, said mortgage giants Fannie Mae and Freddie Mac and several major loan servicers had stopped foreclosures during the holiday season. The recent implementation of Senate Bill 1137, which requires loan servicers in California to take more steps to prevent borrowers from losing their homes, contributed to a delay in foreclosure activity.
"It's not unusual that we are seeing foreclosure activity going up," Hobbs said. "Whether this is permanent remains to be seen. There was a huge backlog."
DataQuick analyst Andrew LePage said an unknown number of defaulted loans remain in a holding pattern, while lenders wait to see if there will be some kind of bailout from the government.
Lenders also may be considering loan modifications, short sales or deeds in lieu, where the borrower simply hands over the keys, he said.
If lenders are pursuing alternatives to foreclosure, there's a chance the current spike in notices of default won't result in a surge of actual foreclosures later on, LePage added.
In Valley Center, Esmeralda Pacheco, 31, a stay-at-home mom, said she was in a holding pattern for several months as she tried to get her delinquent home loan modified. After two nonprofit loan counselors were unable to secure a reduction in her monthly mortgage payments, Pacheco took charge of the case herself and contacted her loan servicer directly.
"I hounded them every day," she said. "I called until I could talk and get answers."
Her servicer recently agreed to bring her loan current by adding several missed payments to the unpaid balance.
"They are delaying the debt," Pacheco said. "It is a positive thing. It prevented the foreclosure process."
Dave McDonald, president of the San Diego County chapter of the California Association of Mortgage Brokers, said foreclosures will continue to increase if the recession deepens and more people continue to lose their jobs.
Analysts are divided over whether President Barack Obama's recently announced $75 billion foreclosure-prevention program will help a significant number of Californians keep their homes.
DataQuick's LePage said he sees potential for a new wave of foreclosures that result from defaults on risky mortgages in mid-to-high-end neighborhoods. Such mortgages include "stated-income loans" and "payment option adjustables," in which the homeowner can pay a variable amount but any interest not paid is added to the principal.
A DataQuick review of ZIP codes within the county showed the top five foreclosure areas were Nestor 92154, with 55; North Oceanside 92057 with 54; South Chula Vista 91911 with 50; East Escondido 92027 with 46; and Encanto 92114 with 44. The community that ranked highest when measured by foreclosures per 1,000 homes was West Vista 92083, with 34.
Statewide, RealtyTrac said foreclosure filings were reported on 80,775 properties in February, the most of any state and a 5 percent increase from the previous month. The state's foreclosure activity increased 51 percent from February 2008.
Nationwide, RealtyTrac reported foreclosure filings - default notices auction-sale notices and bank repossessions - on 290,631 properties during February, an increase of nearly 6 percent from the previous month and an increase of nearly 30 percent from February 2008.
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