Foreclosures jump 116% in California in last year

Surge expected as protections end for tardy payers

(Illustration by Kevin Cifuentes for The Real Deal with Getty Images)
(Illustration by Kevin Cifuentes for The Real Deal with Getty Images)

The number of foreclosures in California has doubled, with the state second in the U.S. for the number of people at risk of losing their homes.

Foreclosures in the Golden State jumped 116 percent from a year ago as restrictions end on the ability of lenders to move against seriously delinquent owners, the Orange County Register reported, citing data from ATTOM.

The number of foreclosures across the nation was even higher, rising 153 percent. California ranked 36th with its 116 percent rise in foreclosures, from last year’s first half.

The biggest jumps in foreclosures were in Colorado at 595 percent, then Michigan at 497 percent and Minnesota at 268 percent.

Lender flexibility and government regulations put foreclosures on pause during the pandemic, making an increase expected as protections ended for tardy payers. The robust economic rebound out of the lockdown created big jumps in home values, suggesting a huge, marketing-crashing wave of foreclosure is unlikely, according to the newspaper.

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In terms of sheer number of foreclosures, California ranked No. 2 in the nation with 16,340 homes in the process.

In first place was Florida with 17,624 home loans in trouble. Following California was Illinois at 14,086, Texas at 11,527 and Ohio at 11,028.

Analysts also looked at the foreclosure numbers adjusted for the size of a state’s housing market. By that measure, California ranked 14th highest with a home in foreclosure for every 881 units statewide versus an 854 figure nationally. At the top of the list, there’s a troubled borrower in Illinois for every 385 homes.

While official foreclosures have risen, CoreLogic reported that only 1.9 percent of California mortgages in May were in any trouble — defined as 30 days late or more — half of May 2021’s 3.8 percent. Troubled mortgages were 1.9 percent in Los Angeles-Orange Counties, down from 4.1 percent in the past year; and 2.6 percent in the Inland Empire, a drop from 4.8 percent.

— Dana Bartholomew

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