Foreclosures soared nearly 400 percent across the greater San Fernando Valley in August as the residential real estate market sank further and lenders tightened credit standards, a research center said Tuesday, the Los Angeles Daily News reports.
Last month, 289 families from Glendale to Calabasas lost their homes, 231 more than in August last year, or a 398.3 percent increase, said the Economic Research Center at California State University, Northridge.
So far, there have been 552 foreclosures in the first two months of the year’s third quarter, and the final number will likely top the 632 foreclosures in the second quarter, said Daniel Blake, the center’s director.
The center’s records go back to 1988, and, in that time span, foreclosures peaked at 1,854 in the third quarter of 1996, the bottom of the last market downturn.
Blake said foreclosures are rising because homeowners who bought a year or two ago with adjustable-rate loans cannot afford the higher payments they are seeing now as their interest rates spike.
“It’s climbing right now, and I don’t see any reason for it to drop off that pace,” he said. “These mortgages are continuing to (reset at higher rates), and they will continue to (do so) for the next 12 to 19 months at a pretty steady pace.”
