Orange County Foreclosures Fall but Defaults Rise

The rate of foreclosures in Orange County declined in June, but the rate of defaults rose, based on analysis of foreclosure filings in Santa Ana, considered the fourth most densely populated city in the U.S.

In June, 0.4 percent of all outstanding home loans in Orange County were in foreclosure, a drop from the 0.5-percent rate in May and from the 0.9-percent rate in June 2008.

In the second quarter, foreclosures declined in about 70 percent of zip areas in the county, compared to the second quarter of 2008.

But the rates of delinquencies rose in June. About 6.6 percent of all outstanding mortgage loans were behind in monthly payments by more than 90 days, but these have not yet received notices of default. The rate marked an increase of 6.3 percent from May and a jump of 4.1 percent from June 2008.

Meanwhile, the rate of home loans with foreclosure suits but not yet processed reached 2.3 percent of all outstanding loans in June, an increase of 2.3 percent from May and an increase of 1.5 percent from June 2008.

Housing analysts contend that the rate of foreclosures may have slowed down because of efforts to step up the Home Affordable Modification Program. But because of the rise in rate of defaults, foreclosures are expected to jump up again.

There are other factors that could spike foreclosures, including the continued rise in the unemployment rate and the resetting of pay-option adjustable-rate mortgage loans.

The unemployment rate in Orange County is hovering around 8 percent and is expected to hit 9.7 percent in 2010 due to the lingering effects of the recession.

There are also those who contend that despite efforts to intensify loan modifications, many lenders are not working out modifications because they believe that modifications are costlier than foreclosure. They believe that many borrowers whose loans are modified will redefault after just several months.

In Orange County, foreclosures declined to only 482 single family houses and condo units in April. But they reversed their direction in the following months, putting 591 units in May and 833 units in June into foreclosure.

Meanwhile, in a survey of foreclosures in the first 6 months of the year in 203 metro areas with the biggest foreclosure rates, the metro area covered by Santa Ana, Los Angeles and Long Beach had more than 106,000 foreclosure cases, with 2.41 percent of all mortgage loans receiving foreclosure filings.

Related Posts:

• Mortgage Defaults Up, Repossessed Houses to Rise
• Drop in Charlotte Home Sales Slowed Amid Foreclosures Homes
• Southern Florida Repossession Property Inventories to Rise
• Find Home Foreclosures in Top-Ranking Cities
• Indicators Rose in July despite Foreclosures for Sale