News from DataQuick
Lenders filed a record number of mortgage default notices against California homeowners 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, a real estate information service reported.
A total of 135,431 default notices were sent out during the January- to-March period. That was up 80.0 percent from 75,230 for the prior quarter and up 19.0 percent from 113,809 in first quarter 2008, according to MDA DataQuick.
Last quarter's total was an all-time high for any quarter in DataQuick's statistics, which for defaults go back to 1992. There were 121,673 default notices filed in second quarter 2008 and 94,240 in third quarter 2008, during which a new state law took effect requiring lenders to take added steps aimed at keeping troubled borrowers in their homes.
"The nastiest batch of California home loans appears to have been made in mid to late 2006 and the foreclosure process is working its way through those. Back then different risk factors were getting piled on top of each other. Adjustable-rate mortgages can be good loans. So can low- down-payment loans, interest-only loans, stated-income loans, etcetera. But if you combine these elements into one loan, it's toxic," said John Walsh, DataQuick president.
The lending institutions with the highest default rates for loans originated in August to November 2006 include ResMAE Mortgage (69.9 percent of loans resulting in a default notice), Master Financial (64.6 percent) and Ownit Mortgage Solutions (63.6 percent). (WTF, how can 70% of thier loans go bad, people should go to jail for this stuff) Of the major lenders, IndyMac has a default rate on those loans of 18.9 percent, World Savings 8.0 percent, Countrywide 7.7 percent, Washington Mutual 6.3 percent and Wells Fargo 3.4 percent. Less than 1 percent of the home loans originated in late 2006 by Citibank and Bank of America have since gone into default.
Trustees Deeds recorded, or the actual loss of a home to foreclosure, totaled 43,620 during the first quarter. That's down 5.5 percent from 46,183 for the prior quarter, and down 7.6 percent from 47,221 for first-quarter 2008. They reached 79,511 during last year's third quarter before dropping because of lenders' temporary policy changes (e.g. a temporary foreclosure moratorium).
In the last real estate cycle, Trustees Deeds peaked at 15,418 in third-quarter 1996. The state's all-time low was 637 in the second quarter of 2005, MDA DataQuick reported.
4 comments:
That near-70% default rate highlights something that gets muddled in media reporting. Fannie and Freddie pushed into sub-prime and alt-a a little, but most of really toxic loan securitizations were what they called "private label", in other words, Wall Street securitizations.
The reason the credit standards were so abysmal was the attitude of "don't worry about what's in there, we are selling off all of the risk".
My friend serviced the Own-it Mortgage A/C system. The place (a tilt-up)was bigger than Costco.
One month full of 20 year olds saying "yes yes yes" on the phones. the next month empty.
Strength of domestic economy will sustain the external challenges. A nation should maintain confidence so that economy will remain afloat.
The first big tsunami is on its way! I am looking into eastvale area and I have been noticing that the number of listing kept dropping everyday. Most of the market was made up of short sales! but I think the wait is over now! There are 304 houses getting auctioned in the month of may! I dug a little deep into the data from foreclosure radar and it is by far the highest number of sales per month ever. This explains a lot! I looked at numbers from previous months and I noticed that the number of actual foreclosure sales has been pretty low recently. there were just 12 net sales in march. When compared to the "norm" it way too low. Compared to last year its been down 4 folds. And if there is a shadow inventory out there then I see some major problems for housing! I feel bad for all those knife catchers but then are quite annoying pests who make the house buying experience hell! Those bidding wars are crazy! I don't know if people will ever understand that market is distressed its not coming out of the woods anytime soon! Why not pay them what its worth! I can see another bubble replacing this one once the economy gets out of the woods in 3 years or so. Thanks for all your good work X!
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