From the Press Enterprise
Mortgage defaults, which mark the start of the foreclosure process, spiked in Riverside and San Bernardino counties in August after a two-month decline, smashing hopes that the flood of home foreclosures might be about to ebb.
RealtyTrac, which today released last month's foreclosure trend data, also said the combination of all foreclosure activity in both counties, as measured by notices of default, trustee sales and repossessions, reached the highest level in August since the Irvine-based company began following foreclosures in January 2005.
With 11,485 foreclosure-related filings last month, Riverside County ranked fourth nationally in foreclosure activity, with one filing for every 64 households. San Bernardino County ranked sixth with 9,651 filings, or one for every 69 households.
In Riverside County, total foreclosure-related filings were up 58 percent from a year ago and 39 percent from July, while in San Bernardino County, total filings increased 98 percent from August 2007 and 34 percent from the month before.
Most of the growth was in bank repossessions. There were 4,165 in Riverside County, up 248 percent from a year earlier, and 3,172 in San Bernardino County, up 348 percent.
In July, some industry analysts took heart that the worst of the foreclosure crisis might be ending because the two Inland counties had experienced two consecutive months of declines in default notices. That trend ended in August, when 5,002 notices of default were posted in Riverside County, 80 fewer than in August 2007 but almost 27 percent more than the 3,946 notices posted in July.
Also, 4,329 notices of default were filed last month in San Bernardino County, up 18 percent from the 3,667 filed a year ago and up 22 percent from 3,542 default notices in July.
Chapman economist Esmael Adibi said he was disappointed by the uptick in defaults.
"We are not out of the woods," Adibi said. "We are going to deal with this issue of foreclosure much longer than people anticipated or anticipate even now."
RealtyTrac said although foreclosure activity also reached record levels nationally last month, the annual increase of 27 percent was lower than earlier in the year.
RealtyTrac spokesman Daren Blomquest said the change could be attributed to greater efforts being made by lenders to negotiate loan modifications to prevent foreclosures or by new legislation that gives homeowners more time to work out their financial problems before homes go into default. It is possible that foreclosures are simply being delayed, he said.
Adibi said he does not expect a decline in foreclosures because of mortgage failures anticipated from a large wave of adjustable-rate mortgages scheduled to reset late this year and in 2009. Many of the mortgages at risk were made to people with good credit who had the option of making ultra-low monthly payments that would have caused their loan amounts to grow.