Home foreclosures rising in California. Here's why (2024)

FAQs

Home foreclosures rising in California. Here's why? ›

What might be causing this? Real estate experts suggest that it's simply a return to the pre-pandemic norms. “During the pandemic, borrowers got a lot of help through mortgage relief and loan forbearance programs. Many of these programs have ended, so now it's easier for lenders to pursue foreclosure.

The report also noted that states with the highest foreclosure rates in March 2024 were Illinois (one in every 2,548 housing units with a foreclosure filing); Connecticut (one in every 2,609 housing units); New Jersey (one in every 2,638 housing units); Florida (one in every 2,779 housing units); and South Carolina ( ...

Major reasons for foreclosures are:

Job loss or reduction in income. Debt, particularly credit card debt. Medical emergency or illness resulting in a lot of medical debt. Divorce, or death of a spouse or partner who contributed income.

Although foreclosures are rising, they remain well below the levels recorded during the 2008 financial crisis. But the problem could soon get worse as high home prices, mortgage rates and property taxes bite Americans.

Under this law, the servicer can't officially begin the foreclosure until 30 days after it has contacted you in person or by phone—or satisfied specific requirements for attempting to contact you—to assess your financial situation and explore alternatives to foreclosure, like a loan modification or repayment plan.

The foreclosure rate in California is still relatively low compared to the national average, but it is increasing. In March 2023, the foreclosure rate in California was 1 in every 4,244 households. The national foreclosure rate was 1 in every 1,217 households.

Among all 50 states, California had the most foreclosure filings with 4,079, while North Dakota had the least with only 13 filings. In terms of states with the highest foreclosure rates, South Carolina, Delaware, and Florida claimed the top three spots, respectively.

Mortgage rate predictions 2024

NAR believes rates will average 7.1% this quarter and fall to 6.5% by the end of 2024. While there's some dispute on exactly how much rates will decrease, the general consensus is that mortgage rates will go down later in 2024 and end up in the mid-to-low 6% range.

Of all 50 states, California had the most foreclosure filings (3,975), and Vermont had the least (11). As for the states with the highest foreclosure rates, Illinois, Connecticut, and New Jersey took the top three spots, respectively.

Who Suffers the Most in Foreclosure? Homeowners suffer the most in foreclosure because they lose the home that they live in as well as take a huge financial loss due to the foreclosure.

Why do banks charge foreclosures? ›

Loan foreclosure fees refer to the charges associated with early loan repayment. These charges help lenders cover the interest that they will not get due to the early repayment of the loan. It typically ranges between 3% and 6% of the outstanding loan amount.

Bank repossessions decrease slightly nationwide

States that posted the largest number of completed foreclosures in Q3 2023, included Illinois (1,032 REOs); Pennsylvania (743 REOs); New York (673 REOs); Ohio (617 REOs); and California (610 REOs).

Notice of Default – Foreclosure starts when your lender records a Notice of Default against your property with the Registrar Recorder's office. The Notice of Default tells you the total amount you owe including missed payments and foreclosure fees.

The foreclosure rate reached its peak in 2010, just after the financial crisis of 2007-2009. Since then, the rate has steadily fallen.

After the median price increased 5.7% year-over-year to $831,500 in 2022, CAR estimates the statewide median price will dip to $758,600 in 2023 for an 8.8% decline.

According to a recent report from ATTOM, the Riverside-San Bernardino-Ontario metro area in California has one of the highest foreclosure rates of any city in the country.