Foreclosure bumper crop for California in 2008

California mortgage defaults and foreclosure sales shot up 131% in 2008 over the previous year, according to real estate data provider Default Research Inc. and reported by Bloomberg News on Tuesday.

The jump accompanied steep home price declines. The latest statistics from MDA DataQuick put the statewide median home price paid at $258,000 in November, a 37.7% nosedive from $414,000 for November a year ago.
   
From Bloomberg:

The three California counties with the highest number of foreclosures were Los Angeles, with 122,408 last year, followed by Riverside, with 82,072, and San Bernardino, with 64,144, Default Research said.

Once again, Southern California leads the way.

So will 2009 foreclosures top 2008's? Serdar Bankaci, founder of the Mt. Pleasant, Pa., foreclosure tracking firm, is quoted at Jon Lansner's O.C. Register blog as saying they "expect to see foreclosure activity continue through the first two quarters of 2009" but improving by the third quarter.

Seems optimistic to me. What about all those Alt-A and option ARMs that have yet to adjust?

-- Lauren Beale

Thoughts? Comments?

Photo: A home in the El Sereno area of Los Angeles. Credit: Francine Orr / Los Angeles Times

Comments

[Laker]

Cal ,
They want to do it quick (the buy N' bail) so as soon as it happens I will let you know the outcome.

[Cal]

A- I still love how your missing the big picture, you claimed I was wrong because interest rates will spur a this huge wave of buy n' bailers. I pointed out that buy N' bail has been removed as a systemic problem and you are trying to show this one couple making greater than 98% of US incomes with a great FICO is going to go from a $4k PITI to a 1.2k PITI is going to (still yet to be seen) successfully buy N' bail. It's a moot point relative to the first issue, the vast vast majority of the market aren't in this situation with great reserves good FICOs and great incomes so again low interest rates won't cause a large number of Buy N' Bailers.

B- The amount of credibility I give you is between 0 and none. If your family whatever actually pulls this off let someone credible know (a reporter that has agreed to keep the details confidential) the details and come on here and back your story. I quite simply discount everything you say because you are quite prone to exaggeration. You can then rub my nose in it that I was wrong and your family members could in fact commit fraud and get it past the underwriters and whoopee for them.

[Laker]

Cal, Lower interest rates will cause many to BAIL. that is what I've said and still saying. I also said many that don't have the means...will not buy. But Bail they will.

I'm a lot more credible than you think. If and when it happens, I will let Lauren all the details. Assuming you give her more credibility than 0.
BTW is Lawrence Yun credible more than me in your opinion?

AND, there is no fraud in what they are trying to do!!! They simply want to buy the 2nd house as it is more convenient to them to get to work. The payment is good and price is great so why not!
As i said before, they will try to short sell it. NO FRAUD!
Unless you call all short sellers fraudsters..

[Cal]

Laker,

I'd love to know how they buy a house without committing fraud while planning to short sale or foreclose on the previous home.

Here is a 1003 to look at:
http://www.freddiemac.com/sell/forms/pdf/65.pdf

Simple question for your relative:
Present Address _Own _Rent

He lies and says Rent? Fraud. They ask to see rent checks.. He doesn't have them.. Red flag.
He says Own. Great. They are going to wonder why they are buying this other house and he goes under the other underwriting guidelines. Red flags galore will be seen (especially if it is under a 50mi radius).

Then there is this whole checkbox section at the top:
"Co-Borrower information must also be provided (and the appropriate box checked) when _ the income or assets of a person other than the Borrower (including the Borrower’s spouse) will be used as a basis for loan qualification or _ the income or assets of the Borrower’s spouse or other person who has community property or similar rights pursuant to applicable state law will not be used as a basis for loan qualification, but his or her liabilities must be considered because the spouse or other person who has community property or similar rights and the Borrower resides in a community property state, the security property is located in a community property state, or the Borrower is relying on other property located in a community property state as a basis for repayment of the loan."

Is he gonna say he isn't married or something? So he says he's married they see the other house she owns... The loan will smell to high heaven.

Simply trying to get a loan for a new house while planning to short sale or bail on the other house and not mentioning to the new lender is Fraud. Maybe you should look up the definition of fraud sometime because you clearly think it means something other than I do.

Outside of what el_guapo said I still don't see how low rates will spur a rash of buy N' bail (or buy N' short sale). I can see bail first and short sale first but then good luck getting a loan.

[Laker]

Cal, I appreciate your extensive and thorough followup. Once i fine more details and/or results from that move, I will share them.
I actually told them myself that it would be tough to buy the new place with the old place upside down....but they have perfect FICO, high income, low DTI, so you know, if they can't pull this thing, i don't know who will. We shall see....