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Foreclosure Activity Down 7% in 2nd Quarter

August 08, 1995| Compiled by Jack Searles

In a sign that Ventura County's housing market may have seen the worst of the recent turndown, foreclosure activity in the county declined during the second quarter from a year ago, reversing a statewide trend.

Lenders started proceedings against 629 houses and condominiums in the county from April through June of this year, a reduction of more than 7% from the 679 actions filed in the same period of 1994, DataQuick Information Systems reports.

This contrasts with year-to-year increases of more than 2% in Southern California as a whole and nearly 3% statewide.

The report provides a ray of hope in view of a sharp year-to-year decline of more than 26% in Ventura County housing sales during the second quarter.

For its study, DataQuick surveyed notices of default--the first step in the foreclosure process--filed throughout the state against owners of houses and condominiums.

Donald L. Cohn, DataQuick's chief executive, said he expects the level of activity in California to stay roughly the same through the end of the year and then to decline. He noted that foreclosures are a lagging indicator, reflecting year-ago economic distress.

While Ventura County has seen a decline in filings, the foreclosure problem remains severe in other parts of Southern California, the reporting service said.

A large number of buyers are falling behind in their house payments in so-called affordable areas that showed rapid growth in the 1988-89 buying frenzy, Cohn said.

"A lot of the homes in Riverside and San Bernardino counties were bought with down payments of 3% to 5%," he said. "Those properties don't have to come down very much in value before the owner owes more than it's worth--a typical foreclosure situation."

Homes that have been repossessed are selling at an average of nearly 16% less than other homes, DataQuick reported. The price differential is more than 3% steeper than it was a year ago.

In some high desert communities in San Bernardino County, where repossessed homes account for half of all properties on the market, the foreclosure "discount" amounts to more than 22%, the service said.

In turn, reduced prices for foreclosed homes are putting a drag on the prices of other homes.

Statewide, lending institutions started foreclosure proceedings on a total of 32,253 houses and condos in the second quarter. This compared to 32,913 in the first quarter and 31,380 in last year's second quarter.

Foreclosures throughout the state hit an all-time peak of 33,122 in the second quarter of 1993.

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