Notices of default deliveries slowed down in September after the passing of SB 1137, asking lenders to give delinquent payers 30 days grace period before the actual foreclosure process begins. But it seems that this legislative effort to reduce foreclosure is a failure according to Sean O’Toole of ForeclosureRadar.
In reality, SB 1137 only delayed foreclosure. The troubled homeowners were already in to deep problem that they can not save themselves from losing their homes anymore. It is said that average repossessed properties are now worth $180,000 less than its mortgage balance.
Mortgage companies on the other hand can not extend help by lowering initial balances for they have their own troubles themselves.
SB 1137 took effect last summer. Then only three months after, it rebounded in December when 42,421 notices of default were sent. The steady number of foreclosure cases in November suddenly surge that it almost doubled, ending the year with a record breaking total number of 249,940 foreclosure cases. This is 158 percent of 2007’s nearly 97,000 cases only.
It is estimated that the foreclosures of 2008 cost an estimated $108 billion worth of mortgages.
According to MDA DataQuick, California has not experienced this many repossession cases since 1996 when there were only 58,000 repossession cases filed.
One of the most affected counties in California is Santa Clara. About 6,268 homes were repossessed, 270 percent more than 2007. But it is said that the drastic increase is just because Santa Clara did not have that much foreclosures in 2007.
Monterey County was also hit badly by the housing crisis with foreclosures increasing up to 262 percent.
However, Southern California experienced the greatest impact of foreclosure last year.
The housing industry has not shown great improvements yet. Let us just keep our fingers crossed this 2009, that our homes will be spared by this foreclosure plague.
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