California Foreclosure Crush Continues
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CNN and the AP reported today that foreclosures in the state of California rose in the second quater to the "highest level in at least 20 years."
DataQuick Information Systems also says in its report Tuesday that the number of default notices sent to homeowners has hit an all-time high.
Over 63,000 homes were lost to foreclosure between April and June - the most in any quarter since 1988, when the firm began tracking foreclosures. That is an unfortunate, staggering and surprising number, even when considering how bad the mortgage/credit market is right now.
That means hundreds of thousands of people (if you consider how many people could potentially occupy a home) were subjected to severe pangs of the mortgage mess (i.e. TILA fraud) and/or the real estate slump (people who found themselves unable to sell their homes before it was foreclosed on). Imagine filling Dodger Stadium's seats four times over and that would be the equivalent of people directly affected by the foreclosure data released by DataQuick Information Systems. The 63,000 homes foreclosed on doesn't even represent the neighboring homes (or the people indirectly affected) that have and continue to lose value, as a foreclosed home suppresses surrounding homes' value; the longer a foreclosed home sits on the market, the homes within a reasonable distance depreciate further.
Based on this information and comparing it to last year's foreclosure rate, foreclosures in the second quarter of 2008 increased 33% from the previous quarter and 261% from the same quarter last year.
On top of all of this news, Wachovia and Washington Mutual posted over $12 billion worth of losses today. Both banks cite risks in the subprime market and payment-option mortgages as primary contributors to their massive losses.
It doesn't feel as if this credit crisis is ending anytime soon.