Saturday, August 13, 2005

California Foreclosure Activity Stops Declining

Cooler appreciation rates are being blamed for a leveling off of California's foreclosure activity. In other words, there have been fewer and fewer foreclosures in the past few years because interest rates were so low. People were able to refinance their way out of trouble, instead of succumbing to foreclosure. But now, that might be changing. Foreclosures are no longer declining, they're leveling. The question no one can answer yet is whether this is the point at which foreclosures start to climb. Many believe that will eventually happen when those who gambled on high-risk loans fail to see the double-digit market value increases they were planning on. The story from DataQuick Real Estate News says:
La Jolla, CA.--A nine-year drop in California foreclosure activity appeared to level off during the second quarter, the result of a maturing real estate cycle and cooler appreciation rates, a real estate information service reported.

Lending institutions sent default notices to 12,408 California homeowners during the April-to-June period. That was down 14.4 percent from 14,501 for the first three months of the year, and down 0.9 percent from 12,520 for last year's second quarter, according to DataQuick Information Systems.