Foreclosure notices go wild

More homes went into default statewide and in Colusa, Sutter and Yuba counties during the first three months of this year, according to a real estate information firm.

Notices of default in California jumped to their highest level in more than 15 years, DataQuick Information Systems, of La Jolla, reported Tuesday.

Statewide notices of default filings increased 143.1 percent in the first quarter of 2008 from the same period a year ago. The notices sent by lending institutions, which mark the first step in foreclosure proceedings, totaled 113,676 in California.

Colusa, Sutter and Yuba counties also saw more default notices issued during the first quarter of this year, DataQuick figures show.

Yuba County saw the highest total number of the three counties with 357 notices recorded, an increase of 136.4 percent.

Colusa and Sutter counties have relatively small total numbers of default compared to some other counties, which had notices numbering in the thousands.

But Colusa and Sutter appeared to be catching up quickly in terms of percentage growth. Colusa default notices quadrupled to 81. Sutter County defaults zoomed by 195.6 percent to reach 337 notices.

Kory Hamman, a broker who handles foreclosure sales for Hamman Real Estate, of Gridley, said the trend is toward more foreclosures. And it shows no signs of easing soon.

"We're seeing more foreclosure activity, and we don't see it slowing down," said Hamman.

DataQuick said declining home values and a pool of risky mortgages were behind the jump in foreclosure activity. Most of the loans that went into default last quarter were originated between August 2005 and October 2006. The median age was 23 months, up from 16 months a year earlier.

"The main factor behind this foreclosure surge remains the decline in home values," Marshall Prentice, DataQuick's president, said in a statement. "Additionally a lot of the 'loans gone wild' activity happened in late 2005 and 2006 and that's working its way through the system. The big 'if' right now is whether or not the economy is in recession. If it is, the foreclosure problem could spread beyond the current categories of dicey mortgages, and into mainstream home loans."

Hamman said higher gas prices may be an additional source of trouble for Yuba-Sutter, causing commuters who work in Sacramento to look for deals closer to their jobs and avoid commuting costs.

Foreclosure problems show little sign of abating in Yuba-Sutter as large numbers of adjustable-rate mortgages reset to higher rates, a local attorney said.

"It's going to get worse before it gets better," said Lee Pliscou, directing attorney for the Marysville office of California Rural Legal Assistance, a nonprofit law firm that holds workshops to help homeowners work out loan problems. "It really started to pick up a year ago, and it's been steadily increasing."

DataQuick said that 47,171 homes were lost to foreclosure in California. It was the highest figure for trustees deeds recorded by the firm since it began tracking the data in 1988.

The firm estimated that a third of homeowners managed to bring payments current, refinance their home, or sell it to pay off what is owed. The figure was at 52 percent a year ago.

The increase in homes lost to foreclosure reflects lower home prices. An increase in multiple-loan financing used to buy homes can also thwart attempts at working out a solution.

Contact Appeal-Democrat reporter John Dickey at 749-4711 or jdickey@appealdemocrat.com.