Northern San Joaquin Valley mortgage defaults are soaring to levels two to three times higher than last year, a real estate information service reported Monday.
Notices of default, the first step toward foreclosure, have been climbing steadily in the valley and throughout California.
During the first quarter of 2007, the number of default notices sent to California homeowners increased to its highest level in almost 10 years, according to DataQuick Information Systems.
DataQuick blamed flat home values, slow sales and adjustable rate mortgages for homeowner mortgage woes.
It said the spike has been fueled largely by people who bought houses or took out home equity loans during the past two years.
"Today's activity reflects a peak in the number of home loans made back in the summer of 2005," said Marshall Prentice, DataQuick president. "The loans being made back then were riskier because of the subprime activity, as well as higher appreciation rates. It's easier to make a loan when the security for that loan is going up in value, than when values are flat."
In Stanislaus County, 1,141 notices of default were filed during January, February and March. During the same months last year, only 451 notices were filed. That's a 153 percent increase.
The situation was even worse in Merced County, where 511 default notices were filed this year, compared with 153 last year. That was a 234 percent increase.
San Joaquin County default notices soared nearly 194 percent, rising from 586 last year to 1,721 this year.
Statewide, there was a 148 percent increase in default notices. Compared with other regions of California, the Central Valley had the greatest increase in default notices — nearly 166 percent.
Mortgage defaults have been on the rise statewide since fall 2005, coinciding with a slowdown in sales and lagging home appreciation that began that year. The notices serve as early indicators of possible foreclosures.
11,033 foreclosed statewide
When home appreciation slows, it makes it harder for homeowners who fall behind on payments to sell their homes.
The median age of the loans in default last quarter was 15months, DataQuick said. The median amount of primary loans in default was $331,200. The median amount homeowners fell behind was $10,784.
On lines of credit, borrowers owed a median of $3,580.
On a loan-by-loan basis, mortgages were least likely to go into default in Marin, San Francisco and San Mateo counties. The likelihood was highest in Sacramento, Riverside and San Joaquin counties.
Most homeowners emerge from the foreclosure process by bringing their payments current, refinancing, or selling the home and paying off what they owe.
About 40 percent of homeowners who found themselves in default last year actually lost their homes to foreclosure in the first quarter. A year ago it was 9 percent, according to DataQuick.
Statewide, there were 11,033 foreclosed homes last quarter, compared with 1,223 in the first quarter of 2006 and 6,078 in the fourth quarter of 2006, the firm said.
Bee staff writer J.N.Sbranti can be reached at 578-2196 or firstname.lastname@example.org.