Foreclosures Skyrocketing In San Diego County

January 25th, 2008 | Tags: Foreclosures

In 2007 the foreclosure numbers tripled in San Diego County. Foreclosures rose by 353% while defaults went up by 128% - these being the highest since 1992. In 1996 there had been a slump in housing because of less spending in defense.

The average price of houses is down by 17% - a fall out from the sub-prime crisis wherein borrowers by the thousands are failing to keep up with mortgage payments. Housing prices had gone up highest in November 2005.

The director of Center for Responsible Lending in California, Paul Leond, blamed the mortgage standards during the boom when price of houses in San Diego County doubled from 2000 to 2005. Many lenders have had to down their shutters because too many loans have gone awry. Loans had been made without scrutinizing the ability of the borrower to repay it. The lenders never reasoned that housing prices couldn’t keep shooting up indefinitely.

During 2007 across California 254,824 default notices had been filed – this being 143% rise from the previous year. Foreclosures went up by 566% to touch 84,375. Those being served default notices are not able to ward off foreclosures. 41% with NOD (notice of default) manage to avoid foreclosure but 59% lose their houses to it. But a year ago 71% were able to come out of the threat of foreclosure by either coming up current or by selling the unit. Today the option of selling is not there because of falling prices. The worth of the house is often less than the loan amount. The prices of real estate have slipped back to levels of 2004. The irony is that very few had any equity on the house even from the beginning because the value was falsely escalated so that the interested parties could get a higher loan amount. Others tapped their equity as soon as it was possible. So now there is no possibility of refinancing.

Every cloud has a silver lining and it is true of people who can now afford the houses and are finding bargains to suit their pockets. Experts opine that prices might drop by another 10% this year. San Diego will see a further downward trend says another expert Stephen Levy. Perhaps stability will return after another two years of tumult.

The last quarter of 2007 in San Diego County was the 11^th consecutive quarter reeling under rising foreclosures.

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