Per DataQuick, foreclosures in California were at the highest level in the first quarter of 2008 in more than 15 years. The lending industry's irresponsible practices during the real estate boom in 2005 and 2006 are the main reason for foreclosures and declining home values.
"The main factor behind this foreclosure surge remains the decline in home values. Additionally, a lot of the 'loans-gone-wild' activity happened in late 2005 and 2006 and that's working its way through the system. The big 'if' right now is whether or not the economy is in recession. If it is, the foreclosure problem could spread beyond the current categories of dicey mortgages, and into mainstream home loans," said Marshall Prentice, DataQuick's president.
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