Sacramento region default notices hit record highs
Both notices of default, the first sign that homeowners are having trouble making payments, and foreclosures reached historic highs across much of the Sacramento area during first quarter reported Sami Siddiqui, President of GreatWest GMAC Real Estate.The statistics are the newest indication of stress in one of California’s most troubled major housing markets. They come as spring sales already are slowing amid a glut of resale inventory and tightening of borrowing standards by lenders.Real estate industry analysts call the region’s defaults an echo from the surge of home loans made during the summer of 2005 as the region’s real estate market soared. That summer, capital region buyers stretched their hardest to buy homes, with about 76 percent using adjustable rate loans, according to DataQuick Information Systems of La Jolla.Many of those loans, as well as refinancing to tap housing boom equity for things like swimming pools and cars, are resetting to higher payments and pressuring the area’s economy."You can’t party forever and our inventory of foreclosed listings shows it”, said Sami Siddiqui of GreatWest GMAC Real Estate.Notices of default -- issued after a homeowner misses at least two monthly mortgage payments -- reached their highest levels ever during this year’s first quarter in Amador, El Dorado, Sacramento, Sutter, Yolo and Yuba counties, DataQuick reported.The number of defaults stopped rising only in Placer County. Nevada County remains below previous highs reached in the 1990s, DataQuick reported.First-quarter foreclosure numbers also reached highs across much of the region -- in Sacramento, Placer, El Dorado, Yolo and Sutter counties -- according to DataQuick, which tracks county property records.DataQuick said 1,505 homeowners in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties lost their houses to foreclosure during January, February and March. That’s up from 865 the previous three months.DataQuick reported just 143 foreclosures in the eight-county region in the first quarter of 2006."Lender inventory of foreclosed properties has increased and will continue to increase” said Brodie Stephens, a Manager at GreatWest GMAC Real Estate.DataQuick attributed part of the record-breaking numbers to a greater supply of homes and loans in the Sacramento region since previous records were established during the recession-plagued mid-1990s. But the bigger factor is a combination of risky 2005 and 2006 loans and falling home prices that make it difficult for owners to refinance out of trouble. Even in a time when the economy continues to generate job growth, selling the house is becoming harder.The Sacramento region has plenty of troubled company. Statewide, defaults reached a 10-year high during the year’s first quarter. Among major urban counties Riverside and Contra Costa counties also had record levels of defaults, DataQuick reported.Nationally, Yuba County ranked ninth and Sacramento 16th among more than 1,000 counties for the percentage increase of defaults from the first quarter of 2006, according to Foreclosures.com, a Fair Oaks-based Web site that tracks them for investors. Placer and El Dorado counties ranked 19th and 20th.
