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Wednesday, January 24, 2007

 

An Unfortunate Truth: Foreclosures

Today's Los Angeles Times continues tracking the trend of increases in the number of foreclosures. Although the current numbers don't represent doom and gloom, they are a reminder of warnings sounded during the frothy days of the housing boom when buyers were gambling on double-digit price appreciation to bail them out of the exotic loans they needed to seal the deal.
The number of Californians defaulting on their mortgage loans is rising rapidly, according to figures released Tuesday, providing striking evidence that more people are at risk of losing their homes.

Default notices jumped 145% in the last three months of 2006, accelerating a trend that began in late 2005 as home sales started to cool.

It was the largest number of default notices in any three-month period since 1998.

Analysts said the increase was not worrisome — yet. But if the number continues to escalate, it could drag down home values in certain communities, they warned.

"So far, this isn't alarming," said John Karevoll, chief analyst at DataQuick Information Systems, which compiled the data. But if default notices "keep going up at this rate, it could get nasty fast," he added.
The rest of the story is online at the LA Times.

— TJ Sullivan in LA
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