from the latimes.com:
http://www.latimes.com/business/la-fi-default31-2009jul31,0,173542.story
About 1 in 10 Californians with a home loan is now in default, and there’s growing evidence that the mortgage meltdown is spreading to commercial real estate.
The home mortgage delinquency rate — the percentage of borrowers who have missed several payments and are in the first stage of foreclosure — climbed in June to 9.5% in California and 9.9% in Los Angeles County, according to First American CoreLogic.
The staggering number of home mortgage defaults probably will lead to large numbers of foreclosures through at least this year, housing experts say.
“It’s probably a given we’ll see a high number of foreclosures in the next couple of quarters due to the level of defaults plus the recession and jobs lost. There’s plenty more pain to come,” said Andrew LePage, an analyst for real estate research firm MDA DataQuick of San Diego.
About time…
Everyone’s been sweeping the number of foreclosures under the rug trying to ignore the 800 pound gorilla.
It’s almost like someone is going to have to pay for something, sometime.
NO NO NO… LA is different!!! 😉
Sorry, I cannot believe that 1 in 10 homes are currently in default. Before I even crack open the LA Times let me guess the journalist; Peter Yong, right? Yep. He loves this decline more than anybody.
Just walk around, look at 10 homes and tell me that one in ten is currently in foreclosure. Something’s not right with that number.
Average in my working-class neighborhood seems to be at least one “For Sale” sign per block – sometimes two. The house next door to me has an offer on it at last. Most of the potential buyers were Asian and the family that bought is (I think) Cambodian – which makes sense since this area has an extremely high Cambodian presence (I now have Cambodian neighbors on either side of me.) I think the new face of SoCal when the dust settles will be very Asian as opposed to Hispanic.
Mozart,
I can’t speak for Peter Yong, but I suspect he should have said, “1 in 10 homes WITH A MORTGAGE are currently in default,” to be more clear. You can’t be in defualt unless you have a mortgage, but not all homes do. SO I would suspect you have to start with the “have a mortgage” universe first.
Mozart
Please, take off your filter, it’s blinding you.
You’re taking someone’s words “default” and translating it into anther word “foreclosure”. You’re either ignorant or intentionally misleading. Which is it?
Default does not mean foreclosure; it is one step along the way.
Besides, if we have 11.6% unemployment, why would it be so hard to believe that a large number of those are failing to make payments? Especially knowing that the only way to qualify for a modification would be to default?
I’m deeply concerned because I see you here everyday, and yet you have such a poor command of the situation. It’s almost as if you’re willfully ignorant.
Chuck Ponzi
Chuck:
If you can’t see it, then it can’t be a problem.
shoppingaround,
Your assumption is correct, but in fairness to the reporter, the first line of the article starts “About 1 in 10 Californians with a home loan is now in default…”
The problem is there is still a REO bottleneck – everything goes in, nothing comes out. Inventory dries up, prices rise.
What they are telling us is the stack of shadow inventory will get even bigger. Great!
What they dont tell is is whether they will be DUMPED onto the market, driving prices down, or they will be DRIBLED onto the market, preventing big declines, just like they have been despite assurances every month or two (the tsunami is coming, the tsunami is coming)…
Okay Chuck, you just made a friend today. Here is that first line from the article: “About 1 in 10 Californians with a home loan is now in default”.
You didn’t even read the article did you? Try to go beyond the headline and see what the story is about.
Seems like your pathetic attempt at a blog isn’t quite getting any traction or a following is it?
You can challenge my assertions, I’m trying to provoke conversation and avoid the echo chamber. I don’t respect you either but try to keep it civil.
I think the 1 in 10 number may be right. However, its more like 3 in 10 in vast stretches of CA where no-one in this board wants to live, and more like 1 in 50 in the small parts of CA where everyone on this board wants to live.
“Seems like your pathetic attempt at a blog isn’t quite getting any traction or a following is it?”
followed by this….
“I don’t respect you either but try to keep it civil.”
Nice way of “provoking conversation.”
Mozart, please quote specific parts of the article and tell us why you disagree with it with data to back you up.
The 1 in 10 number is correct. Now, keep in mind, default is different than foreclosure. Default just means they’ve missed a payment; foreclosure means the bank has taken the property back and will sell it as an REO. Not all properties in default turn into foreclosures; in fact, I would guess the majority do not.
Mozart, You can’t criticize someone else’s work (ie Chuck Ponzi’s website) when you don’t have one of your own. Getting traffic and constantly coming up with fresh content isn’t easy.
And btw I think you’re looking at the world through rose colored glasses as well.
Also, it’s worth it to point out that many homes don’t have a mortgage. Somewhere from 10-30% of houses have no outstanding mortgage on them; I don’t have exact numbers.
Keep that in mind whenever you read a “x% of houses with a mortgage are…” statement.
-Erica
Foreclosure for the entire state when considering Riverside and Merced is probably 10%, but default is a different story. Are we still talking about North County San Diego here? I’d like to here from our experts in Los Angeles and other far flung regions of North America about our local market.
Shadash, just stick to the outrage. You’re good at it. Stay with the one song you know.
And yes, I can criticize a lame blog when I see one. That’s the risk, sure it’s an immense amount of work but that’s not good enough. To be good takes something different. Signing off.
Yeah seriously Mozart, it’s pretty pathetic to attack someone for the work rather than the work itself.
In fairness, Peter Hong’s not creating the data, he’s just the messenger. Why criticize him in the first place. I don’t know how accurate the data from Corelogic is, but without any factual data how can you make an opposing argument?
Might want to know how to spell first before criticizing anything Mozart… “I’d like to here”.
A lot of model homes in Bressi Ranch are in defaults. The thing is they are all own by the same people. Some guy from LA came in bought all the model homes in 2005 and put 20% down on all.
Because of this, it might skewed the number of defaults. The real owners in Bressi Ranch are ok, just the investors are in trouble.
I am dreading the days when the Bank-owned signs go up in BR.
P.S. Stop ganging up on Mozart already!
So according to the article ~10% of mortgages in California are in default, and in recent months 60% of homes in default ended up being foreclosed.
That’s a lot of homes, even factoring in % of owned outright.
Maybe it’s just a lot of people playing chicken with banks for loan mods. I suspect it’s primarily people already hit by the bus though.
Wonder what the % is in RSF right now. 🙂
Mozart is easy to gang up on because he wants to deny the article based on walking around his neighborhood. I realize this is piggington, but the “all others bring data” applies.
And I can’t imagine every owner in Bressi who was not an investor is doing just fine.
The 10 trustee sales scheduled for today on the investor-owned former models in Bressi Ranch were all cancelled.
Not postponed, cancelled – which means that they have to start over with a new NOD to foreclose.
I’m hoping to find out more, but I talked to a tenant this week who said that the property manager told him everything is “fine”. He has been paying rent all along.
In our door-to-door surveying, we’re hearing that 50% to 75% of all defaulters are in the loan-mod phase. How many who get denied will be willing to re-up on their previous payment program? Not many.
Jim…Time for a “Beer Summit” so the sparring parties can pledged future talks aimed at better understanding. Any excuse…..
Agreed, and the truck is ready, but I’m out of t-shirts. Let me work on that, if Obama can arrange a beer summit in a week, then so should I.
whatever you people think about my reporting, at least spell my name right. it’s not hard.
Peter HONG, ’bout time for a follow-up, can you make it to Carlsbad for a beer?
Erica,
It’s approximately 35%, which just tends to emphasize the fact that the *average* homedebtor is in seriously bad shape.
One of the blogs I read has a pretty good rule, if you disagree with something somebody says then you need to quote it and specifically address it. Otherwise it’s just too easy to create a strawman argument that nobody is making. For example:
Just walk around, look at 10 homes and tell me that one in ten is currently in foreclosure. Something’s not right with that number.
Anecdotes don’t count as data. It doesn’t take into account that different neighborhoods, cities and counties have different default rates. It’s also not taking into account that ~30% of homes are owned outright.
SJ said, “I think the 1 in 10 number may be right. However, its more like 3 in 10 in vast stretches of CA where no-one in this board wants to live, and more like 1 in 50 in the small parts of CA where everyone on this board wants to live.”
VERY WELL SAID! I agree 100%. That is exactly what you will find on almost all foreclosure sites. The inland is flooded with foreclosures and it get lighter as you approach the coast.
As for checking on your own neighborhood. We live 15 minutes from the beach in North County and I could easily find 1 in 10 homes with a loan default in our neighborhood. Not to mention people around here talk about it as if they forgot to make a utility payment. It is the norm around here.
I don’t see what all the fuss is about. This is a very easy statistic to believe because it is backed up by data and backed up on the street.
Remember there doesn’t have to be a for sale sign for some one to be in default. In most situations they are living there rent free and in no hurry to sell.
Beer Summit? What happened to the first one at Pizza Port Solana Beach? Did it ever happen?
No, still working on scheduling, song, and t-shirts, but the truck is fueled up!
Bubbleinfo handshake logo should be printed on front and back, sorta like a greeting and goodbye – just my $0.02.