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Loan Defaults Drop Statewide for the Third Month in a Row

January 16, 1994|Special to The Times

The number of recorded notices of default dropped for the third month in a row in November, indicating that foreclosure activity in California has peaked and is on its way down, a real estate information service reported.

Lenders started foreclosure proceedings on 9,112 homes last month, down from 9,663 in October, 10,138 in September and 10,954 in August, Dataquick Information Systems reported.

An all-time statewide peak was reached last June with 12,054 recorded notices of default.

"It does take a while for these properties to work their way through the system. The market will be absorbing distressed homes for most of 1994 and overall prices will be held down, which is good for potential buyers," said Donald L. Cohn, Dataquick CEO.

"But it is good to see that the worst of the problem is behind us," he said.

A notice of default is the first step in the formal foreclosure process. It can take a lender up to six months or more to complete the process, which is halted if the homeowner brings mortgage payments current, or sells the property and pays off the mortgage.

Foreclosure hits at all segments of the market. In Beverly Hills there are currently 45 homes being foreclosed on, 28 in the Bel Air area and 21 in Malibu. There are 108 homes in foreclosure statewide that were originally purchased for more than $1 million.

The vast majority of the foreclosure homes, though, are middle-of-the-road three-bedroom, two-bathroom houses bought for $150,000 to $200,000 four years ago when prices were increasing rapidly.

Home Loan Defaults in '93

Number of recorded notices of default recorded on residential property--by county.

June- Sept.- % Aug. Nov. Chng Los Angeles 11,776 10,164 -13.7% Orange Co. 3,105 2,685 -13.5% San Diego 2,632 2,062 -21.6% Riverside 3,035 2,729 -10.1% S. Bernardino 3,283 2,919 -11.1% Ventura 842 720 -14.4% So. Calif. 24,672 21,280 -13.7%

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