The number of homes slipping toward foreclosure in the Los Angeles area increased by 37.6 percent in the first quarter of the year, compared to the same period in 2008, a real estate information service reported on Wednesday.
Meanwhile, lenders sent a record number of mortgage default notices to 27,981 homeowners in the area in the first quarter, up from the previous year's first-quarter total of 20,339, according to the agency, MDA Data Quick.
Across California, default notices were sent to 135,431 homeowners in the first quarter of the year, an 80-percent increase from the previous quarter and up 19 percent from the same quarter in 2008, when 113,809 default notices were sent, said DataQuick.
The statewide total was an all-time high for any quarter in DataQuick's statistics, which go back to 1992.
"The nastiest batch of California home loans appears to have been made in mid to late 2006 and the foreclosure process is working its way through those," said DataQuick President John Walsh. "Back then different risk factors were getting piled on top of each other. Adjustable-rate mortgages can be good loans. So can low-down-payment loans, interest-only loans, stated-income loans, et cetera. But if you combine these elements into one loan, it's toxic."
Default notices do not always lead to a home foreclosure, according to DataQuick. In general, about 20 percent of homeowners emerge from the foreclosure process by bringing their payments current, refinancing or selling the home.
DataQuick noted that the 135,431 default notices sent statewide, the defaults only affect 130,718 homes, since some borrowers were in default on multiple loans.