We knew it was coming, and now it's here...the return of California's foreclosure crisis.
Okay, it wasn't exactly gone, but maybe just on hiatus thanks to a new state law that went into effect last fall. That law requires lenders to take additional steps to keep troubled borrowers in their homes. Then of course there were various bank and Fannie / Freddie moratoria on foreclosures.
Today DataQuick reports "lenders filed a record number of mortgage default notices against California during the first three months of this year, the result of the recession and of lenders playing catch-up after a temporary lull in foreclosure activity."
Default notices surged 80 percnet from 75,230 for the prior quarter to 135,431 notices in Q1 2009. That's also up 19 percent from the first quarter of 2008. This is a new all-time high for any quarter in DataQuick's statistics, which go back to 1992.
Now you may say, well, these are default notices, not foreclosures, and we've got that great Making Homes Affordable adminstration plan all ready to help all these folks. I'm wondering just how they're going to handle these folks, let alone help them. According to DataQuick, the bulk of the loans were originated in late 2006, at the very height and most desperate frenzy of the housing boom, when lenders were trying to get everyone and their brother into a new loan. I wonder how many of those loans are now so far underwater, given the huge home price declines in California, that no modification is going to help.
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