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May Foreclosure Rate Drops 4.4% From Same Period in '93 : Real estate: Defaults or notices of impending action affected 2,004 homes locally compared to 2,097 during previous May, according to information service. Analysts expect rate to stabilize.

July 01, 1994|DEAN TAKAHASHI | TIMES STAFF WRITER

Orange County's home foreclosure rate dropped 4.4% in May compared to the same month a year earlier, according to a monthly survey by Dataquick Information Systems in La Jolla.

Lenders foreclosed on or filed notices of default--the first step in a foreclosure proceeding--on 2,004 homes in Orange County during May, compared to 2,097 homes in May 1993, the survey said.

Real estate analysts generally expect the foreclosure rate to stabilize in 1994 as the overall economy gradually recovers. However, the reduced activity in May does not necessarily signal a trend.

The slight decrease doesn't make up for an escalation in county foreclosures earlier this year. Orange County's foreclosure rate rose 4.4% in the first five months of 1994 compared to the same period a year ago.

A separate survey of both commercial and home foreclosure rates in Orange County by TRW Redi Property Data indicates that foreclosures were up 29.2% for the first five months of 1994 compared to the same period a year earlier. That compares to a 85% increase from 1992 to 1993 for the same five-month period, and a 110% increase from 1991 to 1992.

The numbers differ from the Dataquick survey, because TRW counts actual foreclosures of commercial and residential properties while Dataquick's review of residential foreclosures includes the notices of default, all of which do not result in actual foreclosure.

"The rate of increase of foreclosures is slowing down in Orange County," said Nima Nattagh, an analyst for TRW in Riverside. "That is the best news we can get out of it."

Lenders foreclosed on 5,112 homes in Orange County from January through May of this year, compared to 4,894 in the same period last year, according to the Dataquick survey.

In Southern California, foreclosures rose 2.2% to 37,385 in the same period, and throughout the state the foreclosure rate is up 7% to 52,731.

However, one sign of economic recovery is evident. The statewide foreclosure rate slowed in May to 10,155, down 12% from a year earlier and down 7.1% from April.

Donald L. Cohn, chief executive of Dataquick, said the year-over-year decline in the state during May was the first drop in the foreclosure rate since it began climbing sharply two years ago.

"Right now the economy is turning around, and home prices are much more stable than they have been during the past couple of years," Cohn said.

The foreclosure rate is a lagging indicator that shows signs of economic distress as much as a year in the past. Foreclosures rise when owners owe more on a property than its market value.

The current slowdown in foreclosure activity is most noticeable in Southern California, Dataquick reported, but foreclosure rates are still twice as high in Southern California than in other parts of the state.

Home and Commercial Foreclosures

Lenders are foreclosing on more properties this year than last, continuing a four-year climb. The 2,532 foreclosures during the first five months of this year is a 29% increase from last year's 1,960 during the same period. The comparable totals for 1992 and 1991 were 1,059 and 504, respectively.

City Jan.-May, 1994 Jan.-May, 1993 % change Anaheim 178 95 87.4 Anaheim Hills 59 65 -9.2 Brea 20 12 66.7 Buena Park/La Palma 77 45 71.1 Costa Mesa 86 54 59.3 Cypress/Los Alamitos/Rossmoor 47 30 56.7 Dana Point 63 51 23.5 El Toro/Lake Forest 155 97 59.8 Fountain Valley 34 35 -2.9 Fullerton 96 72 33.3 Garden Grove 146 97 50.5 Huntington Beach 139 110 26.4 Irvine 105 89 18.0 La Habra 52 24 116.7 Laguna Beach 49 32 53.1 Laguna Hills 90 59 52.5 Lagunal Niguel 91 60 51.7 Mission Viejo 52 46 13.0 Orange/Villa Park 77 63 22.2 Placentia 18 21 -14.3 San Clemente/Capistrano Beach 133 126 5.6 San Juan Capistrano 83 88 -5.7 Santa Ana 337 283 19.1 Seal Beach 5 2 150.0 Stanton 44 29 51.7 Tustin 63 60 5.0 Westminster 84 64 31.3 Yorba Linda 46 64 -28.1 Other 43 30 43.3 Countywide total 2,532 1,960 29.2

Source: TRW REDI Property Data

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