California mortgage defaults at 3-year high (up 67% in the last year)

[Human Torch]

California mortgage defaults at 3-year high
Silicon Valley/San Jose Business Journal - 3:11 PM PDT Wednesday

http://www.bizjournals.com/sanjose/stories/2006/07/31/daily55.html?f=et79&hbx=e_du

Mortgage defaults in California hit a three-year high in the second quarter, up more than 67 percent compared with the same period last year, a report said Wednesday. There were 20,752 default notices sent to homeowners in the state between April and June, a 10.5 percent increase from the first three months of this year, DataQuick Information Systems said.

"This is an important trend to watch but doesn't strike us as ominous," said Marshall Prentice, DataQuick's president. "The increase was a statistical certainty because the number of defaults had fallen to such extreme lows. We would have to see defaults roughly double from today's level before they would begin to impact home values much.

"We hear a lot of talk about rising payments on adjustable-rate loans triggering borrower distress. While there's no doubt some of that is going on, as far as we can tell the spike in defaults is mainly the result of slowing price appreciation. It makes it harder for people behind on their mortgage to sell their homes and pay off the lender." Other factors that contribute to higher defaults include the amount of equity owners have in their homes, the type of mortgage and how long the mortgage has been held.

[cliss]

1. Fasten your seat belts kids, and hang on.

We are seeing the beginnings of a real rough ride ahead.

Now, notice the wording in this article: "..the spike in defaults is mainly the result of slowing price appreciation".

Look at that concept: slowing price appreciation. Price appreciation means the price is going up, it's just not going up as fast as it has in the past.

Now look at the number of defaults: 20,752 default notices in 2 months time. When you go to default, he have hit the bottom of the barrel. You would think that since prices have been APPRECIATING (going up) anybody, absolutely anyone would sell the damn house before it goes to default.

100% proof that people are not able to hang in there. They are like the kitten at the end of the rope.....but they've let go.

[twiterpatted]

They can no longer borrower from the equity to make the house payment.

[twiterpatted]

2. They can no longer borrower from the equity to make the house payment.

[AllNamesHaveBeenUsed]

3. This is the same state with the 50-year mortgage