Foreclosures climb in Sacramento area, but growth rate slows

Foreclosures again climbed sharply in the capital region during April, May and June as 6,075 more households surrendered their keys to the banks, property researcher DataQuick Information Systems reported today.

But DataQuick's numbers show that the rate of growth foreclosure activity in Amador, El Dorado, Placer, Nevada, Placer, Sacramento, Sutter, Yuba and Yolo counties declined during the quarter from previous levels.

Sacramento County accounted for 73.6 percent of foreclosures in the region with 4,475.

Statewide, 63,061 households went into foreclosure during the second quarter as troubles continued with risky loans going bad. That was up 33.5 percent from the first three months of 2008, when DataQuick reported 47,221 foreclosures.

DataQuick analyst Andrew LePage said it's unclear if the slowing growth rate indicates a plateau or the inability of overwhelmed banks to process the foreclosures.

"It's too soon to say if we've peaked or not," he said. "But there is evidence at the monthly level that either the lenders are really bogged down in paperwork or maybe the defaults are declining."

LePage said Sacramento, Placer and El Dorado counties saw fewer notices of default in May and June than in April. Yolo County's June totals dipped below April levels, he said.

Lenders issue a formal notice of default when a borrower misses two or three monthly payments in a row.

Statewide, foreclosures in California soared in the second quarter to the highest level in at least 20 years, as many homeowners who bought at the height of the housing boom were unable to make mortgage payments, a real estate research firm said today.

In addition, the number of default notices -- an indicator of possible future foreclosures -- also jumped during the period between April and June, according to DataQuick Information Systems.

In all, some 63,061 homes were lost to foreclosure in the second quarter -- the most in any quarter since 1988, when the firm began tracking foreclosures.

Foreclosures, measured by the number of trustee deeds recorded, increased about 33 percent from the previous quarter and jumped 261 percent versus the same quarter last year.

The jump in foreclosures reflects the slowing housing market and the number of homes purchased with more than one loan, DataQuick said.

Notices of default, meanwhile, more than doubled in the second quarter to 121,341 loans on a total of 118,020 homes, compared to the year-ago period.

The figure indicates that some borrowers were late on payments on more than one home loan, such as a home equity line of credit.

Default notices increased 6.6 percent from the first quarter and represent the highest count since at least 1992, DataQuick said.

"The small increase in defaults from the first to the second quarter may indicate that we're nearing a plateau," John Walsh, DataQuick's president, said in a statement.

Mortgage defaults have been on the rise statewide since autumn 2005, coinciding with a slowdown in sales and a decline in home prices.

Sales of foreclosed homes have been rising this year, but home prices have continued to slide, making it harder for homeowners who fall behind on payments to sell their homes and clear their debt.

Most of the home loans that slipped into default in the most recent quarter were made between September 2005 and November 2006, as air came out of the housing bubble.

During that period, which saw speculation-fueled sales in inland areas, many borrowers financed homes with more than one loan.

The median age of home loans in default increased to 26 months in the most recent period, compared to 16 months in the same quarter last year.

The median amount of the primary home loans in default was $346,400. The median amount homeowners fell behind was $11,583, the firm said.

Borrowers who took out home equity loans owed a median of $3,492 on a median credit line of $60,000.

The Associated Press contributed to this report.

About the writer:

• Call The Bee's Jim Wasserman, (916) 321-1102. Read his Home Front blog at www.sacbee.com/blogs.