Foreclosures, default notices soar locally and across the state

Home loan defaults and foreclosures spiked again sharply in July, August and September throughout California and the capital region, setting records and adding more stress to an already-slumping housing market.

At least 6,638 homeowners in El Dorado, Placer, Sacramento, Sutter, Yolo and Yuba received formal notices of default -- the first step in the foreclosure process -- from their lenders during the three-month period, reported La Jolla-based property researcher DataQuick Information Systems.

That's up 27.6 percent from April, May and June defaults in the six counties. Lenders typically file a notice of default when homeowners are two to three months behind on payments.

DataQuick says about 46 percent of homeowners who go into default are able to work out financial arrangements to either keep their houses or sell them and pay off their debts. The firm attributed the state and region's rising foreclosure-related activity to "declining home prices, sluggish home sales and subprime mortgage distress."

In the six-county region, 2,731 home owners lost their houses to banks during July, August and September. That's up from 2,203 foreclosures in those counties in April, May and June.

Statewide, more than 24,000 homeowners surrendered their keys to the bank during the three months, DataQuick reported. That's the highest number since the researcher began keeping statistics in 1988.

DataQuick also reported 72,571 default notices statewide during the quarter - half in the former booming residential construction zones of the Central Valley and Riverside and San Bernardino counties. The statewide total broke an old record for defaults set in the first three months of 1996.

Most of the loans that went into default were for homes bought or refinanced between July 2005 and September 2006.

Sacramento County homeowners accounted for 74.5 percent of third quarter defaults in the six-county region with 4,947. The county also had 75.6 percent of the region's foreclosures, with 2,065.

Sacramento County's defaults were up 180 percent from July, August and September 2006. That growth was down slightly from the first two quarters of 2007, when the percentage growth for defaults over the previous year was 184 percent.

Third-quarter figures for the region:

- Placer County reported 728 defaults and 294 foreclosures.

- El Dorado County had 278 defaults and110 foreclosures.

- Yolo County reported 303 defaults and 96 foreclosures.

- Yuba County had 227 defaults and 108 foreclosures.

- Sutter County reported 155 defaults and 58 foreclosures.

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