The Piper Called...
....He Wants to be Paid
(From Inman News) "First-quarter foreclosure activity in California increased to the highest level in more than two years, the result of slower home-price increases, a real estate information service reported."
"Lending institutions sent 18,668 default notices to California homeowners during the January-to-March period. That was up 23.4 percent from 15,122 for the prior quarter, and up 28.7 percent from 14,501 for 2005's first quarter, according to DataQuick Information Systems."
'"A number of factors are driving defaults higher," said Marshall Prentice, DataQuick's president."
'"The main one right now is that home values are rising more slowly than they have been the past couple of years, which makes it more difficult for homeowners to sell their homes and pay off the lender. Other factors that influence default activity include the amount of equity people have in their property, the type of mortgage they used and how long they've had that mortgage."'
In 2005 nearly 70% of home sales were purchased using ARMs and more than 50% were Interest Only.
That is nearly twice the national rate and more than every Bay Area County except San Fancisco
"The median first-quarter default amount on a primary mortgage last quarter was $9,220 on a loan of $280,000. On second mortgages and lines of credit the median amount owed was $3,386 on a loan of $56,760."
Per capita income in Sonoma County in 2005 was $37,384 and had gone down from 2004 and was expected to raise by about $2000 for 2006.