California Foreclosure Activity Highest Since 2001

LOS ANGELES, October 18, 2006 (KABC) -- Foreclosure activity in the state rose to its highest level since 2001 in the quarter that ended last month, with the number of default notices sent by banks jumping 72 percent in Los Angeles County, a real estate information service reported Wednesday.

In Orange County, there was a 101.9 percent jump in default notices sent to homeowners over the same quarter last year, according to DataQuick Information Systems.

It was much the same story across Southern California, with foreclosure notices increasing 104.8 percent in the six-county region in the third quarter, DataQuick reported. San Diego County saw a nearly 160 percent jump in foreclosure notices over the same quarter last year, while Riverside saw a 140 percent rise.

Across the state, lending institutions sent 26,705 default notices during the three-month period -- second only to the 30,225 notices sent during the first quarter of 2001.

In Los Angeles County, banks sent 5,565 default notices from July through September, up from 3,233 sent during the third quarter last year. In Orange County, 1,500 notices were sent, up from 743 in the same period last year.

"Foreclosures happen when people owe more on their property than the property is worth," said Marshall Prentice, president of La Jolla-based DataQuick. "When prices are going up fast, as they were last year and the year before, the number of homeowners in that situation steadily declines. When prices are flat, or going down, fewer homeowners in financial distress are able to use their homes to bail themselves out of trouble."

The median age of the home loans that went into default last quarter was 14 months, and more than half were originated in 2005, according to DataQuick.

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