California Counties: Foreclosed House Listings Keep Growing

Mortgage default rates in the counties of Riverside, San Bernardino and San Diego continued to rise in March, affirming the expectation that more properties would be added to foreclosed house inventories in the next several months, according to Santa Ana property research company First American CoreLogic.

First American also contended that there is a backlog of foreclosures because the foreclosure pace did not rise proportionately with the pace of loan delinquencies.

In the San Bernardino and Riverside metro area, delinquency rates rose to a record 15.7 percent, indicating that one mortgage out of six mortgage loans has been in default for at least three months.

In the county of San Diego, more than 7 percent of all mortgage borrowers or about one in every 14 mortgage loans was in default.

Additionally, more than 4 percent of all mortgages in the San Bernardino and Riverside counties and nearly 2 percent of mortgages in San Diego have received foreclosure filings.

The rising delinquency rates have dampened the market which has recently got its momentum to start recovering when investors and first-time homebuyers started buying.

Mortgage broker Mark Goldman, who also lectures at San Diego State University, expects more properties to be added to foreclosed house inventories because of reduced income, job losses and falling home prices.

Housing analysts explain that foreclosures and prices act in a cycle, as foreclosed house inventories push down prices and low prices causes more homeowners to walk away from their underwater homes.

In North County, foreclosed house inventories are still growing despite an increase of 40 percent in home sales in the first three months.

According to reports from ForeclosureRadar and the North San Diego County Association of Realtors, for every house sold in the first three months, two other houses were added to foreclosed house inventories. This pace is also true for Southwest Riverside County.

Although the actual number of properties added to foreclosed house inventories has dropped, it is not a good sign because the number of default notices has increased.

ForeclosureRadar predicted that North County, with 1,304 default notices, and Southwest Riverside County, with 1,366 notices, would experience the most number of foreclosures the following month.

Another factor that would continue to increase foreclosed house inventories is the impending adjustment of monthly mortgage payments. Many Californians took out loans that required very low payments in the first two to three years but are scheduled to shoot up in the third or fourth year. According to the Federal Reserve, about 220,000 mortgage loans across California will have monthly adjustments in the next few years.