Californians lost their homes to foreclosure in record numbers for a second straight quarter, and the trend is creeping into affluent communities, figures released Friday show.
Foreclosures statewide hit a new high of 24,209, besting the previous record by 39%, according to DataQuick Information Systems. Default notices -- the first step toward foreclosure -- rose to 72,571 for the three months ended Sept. 30, breaking a record set in 1996.
Separately, the Census Bureau reported that the nation's homeownership rate fell for a fourth straight quarter, the longest decline since 1981. The agency said foreclosures helped push the number of vacant homes to a record 17.9 million.
In California, foreclosures are concentrated largely in outlying areas such as the Inland Empire, the Antelope Valley and the Central Valley, where swarms of people with modest incomes used loans with low "teaser" rates to finance their purchases. But data released Friday show that the pain is spreading to higher-priced neighborhoods in Los Angeles and Orange counties and is even trickling into wealthy communities.
In four Newport Beach-area ZIP Codes, for example, there were 11 foreclosures in the third quarter, up from just three in the same period last year. There were seven foreclosures in Bel-Air, and none a year ago.
"It's definitely increasing," said Joyce Essex, a Coldwell Banker real estate agent based in Beverly Hills who specializes in selling foreclosed homes.
Essex said most of her properties were in the San Fernando Valley and South Los Angeles, but about 10% of her listings are now in a more affluent part of town.
"It's working its way to the Westside. The Westside is always last to get hit," Essex said of the foreclosure wave, based on her experience in the 1990s downturn.
In the last six months, Essex's staff has grown from four to 14 to handle the volume of foreclosure work.
In modestly priced neighborhoods, she said, borrowers who are now facing foreclosure had often relied on no-money-down loans and other types of exotic mortgages. When the introductory rates expired, they couldn't make their payments.
At the high end, Essex said, foreclosure victims tend to be "people who kept pulling money out of their houses, using equity [loans] to pay credit cards, buy cars, go on trips."
"They used their homes to get cash and kept pulling equity out," she said.
