Foreclosure Numbers Keep on Rising
Property Shark released another foreclosure report, and despite a slow down last time around, this time it looks like the numbers are going up. Los Angeles leads in the metropolitan areas the report looks at (New York, Miami, and Seattle being the others) with a 196% increase compared to Q3 of 2007 in foreclosures. Ouch.Those numbers mean that .5% of all homeowners in LA are in foreclosure.The good news, if you can call it that, is that all of these foreclosures continue to be centered in the outlying areas like Palmdale and Lancaster (see chart, also courtesy of Property Shark). In the year or so that I’ve been following Property Shark’s reports, I have never seen any central or westside zip codes pop into these heavily-foreclosed categories. It really does seem like in LA, we’re dealing with pockets of very bad real estate that are dragging down prices and sales across the board.The report also made an interesting finding about who is behind all these bad loans: In Los Angeles, Countrywide had the most loans scheduled to foreclose, followed by Washington Mutual. Like most Americans, I’ve been watching the bailout debacle pretty closely, and have actually had mixed feelings on bailing out homeowners who got themselves into bad mortgages. I personally have always been pretty financially cautious and believe in a 30-year fixed with a monthly payment you know you can manage, so I have little sympathy for those who signed up for 1 or 2 year adjustables with a vague hope that they would be earning more or win the lotto by the time the payment changed. But when I see that Countrywide and Washington Mutual are holding so many of these bad mortgages, it does make me give more weight to the predatory lending argument. I have trouble believing that all irresponsible borrowers magically found their way to these 2 lenders. It does make it seem like there was pressure or bad advice being given. I’d be curious to hear what others think….
SO_CAL_RETAIL_SLUT said:
I now you mentioned that Palmdale and Lancaster are a mjor problem, but klook at the numbers for Pacoima, Sylmar and Panorama City areas of the San Fernando Valley and withing the city limits of Los Angeles.
My concern is that we are just seeing the beginning of trouble as most od these homes are entry-level and lower income areas that were impacted first by the mortgage mess.
This is going to spread to those who purchased and/or refinanced with good/prime credit who also chose the pick-a-pay loans, and not all were written by WaMu.
Those ARM loans have begun to mature, with many on a three and five year balloon schedule. Many just will not be able to afford those increased payments who now reside in the more desirable areas of the valley.
Now, the LIBOR rate which most, if not all of the pick-a-pay loans are based on. How are they going to be able to refinance?
I’m afraid much more and severe troubles are coming are way.
October 5, 2008 9:22 PM
WSJ: 1 in 6 Homeowners ‘Underwater’ | Redfin Los Angeles Sweet Digs said:
[...] Redfin posts: Foreclosure Numbers Keep On Rising The Q3 Foreclosure Report is In Debt, the Engine of Prosperity, is Out of [...]
October 8, 2008 8:35 AM
Nick said:
A ton of these are based on the in-fill building frenzy around the edges of LA where we used to have some open space, horse property or less dense single family home neighborhoods. Developers paid double the market price for 2-3 properties and crammed them with detached-condos, OOOPS, sorry, RE-folks, I mean “small-lot-homes”. I almost reduced the selling price by a hundred grand there. Passing the law that allowed “detached condos” to be sold as “small lot homes” was very clever, and drove up condo prices, and then relative to that, home prices, further inflating home prices beyond the normal high end of the cycle. OUCH! I hope the RE Developer’s lobby invested their paychecks somewhere besides RE.
October 8, 2008 11:26 AM