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SAN DIEGO COUNTY — Notices of
home-loan default in San Diego County spiked by 121 percent in
December, dampening hopes that the housing market decline that
began in 2005 is nearing its bottom.
In a sobering year-end report, the MDA DataQuick research firm
on Tuesday said the notices, which mark the start of the
foreclosure process, totaled 31,099 for 2008, a 54 percent gain
over 2007's record of 20,138.
Home foreclosures totaled 1,253 in December, a monthly gain of
20 percent. There were 17,712 home repossessions by lenders within
the county in all of 2008, a 141 percent increase over 2007.
The annual numbers were the highest since DataQuick began
keeping track of county foreclosures in 1988 and defaults in 1992.
They far outpaced the tallies of the mid-1990s, during Southern
California's last big housing slump.
Lenders are no longer making the risky adjustable-rate loans
that triggered the mortgage market meltdown, but thousands of bad
loans have yet to work their way through the system. Analysts say
they aren't certain when foreclosures will slow down or when home
prices will stop falling.
“That is the big question for all real estate economists,” said
Mark Goldman, a real estate finance instructor at San Diego State
University. “There is a consensus that we will hit a bottom
half-way through 2009, but I am not anticipating a rapid
recovery.”
Since the real estate market is sensitive to consumer
confidence, the inauguration of President Barack Obama could have
a positive impact, he added.
Sean O'Toole, founder of the ForeclosureRadar research firm,
said the recent spike in default notices underscores the failure
of government to get a handle on the housing problem at the state
and national levels.
State lawmakers had hoped Senate Bill 1137, which requires
lenders to take more steps to keep troubled borrowers in their
homes, would mark a lasting turnaround in foreclosure activity.
The bill took effect in September, causing default notices to
decline by nearly 58 percent from August. Foreclosures dropped by
nearly 37 percent in October, but the pattern began to reverse in
November, when default notices rose by 24 percent over the
previous month.
SB 1137 “helped a handful of homeowners, but in terms of
reducing foreclosure volumes, all it did was add a delay, and a
shorter delay than I expected,” O'Toole said.
Many of the financial institutions that helped create the
subprime mortgage market meltdown suffered losses during 2008. The
federal response was a $700 billion bailout of the financial
industry that has yet to significantly help homeowners faced with
foreclosure.
The first half of the package was administered by the Bush
administration, but the Obama administration has pledged to do
much more for homeowners in 2009.
Mark Zandi, chief economist of Moody's Economy.com, said the
federal bailout was a flawed but necessary step to preserve major
financial institutions and prevent the credit crunch from
deepening and causing even more foreclosures.
Emmet
Pierce: (619) 293-1372; (Contact)
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