Southland Foreclosures Rise Sharply in Early ’93

The number of residential and commercial foreclosures in Southern California jumped by 80% in the first five months of 1993, compared to the same period last year, according to TRW REDI Property Data.

Between January and May, lenders took possession of 17,850 properties, of which about 85% were owner-occupied homes.

TRW REDI reported that this latest increase in the foreclosures has added $4 billion worth of real estate to the portfolio held by the lenders.

“One of the implications of a rise in foreclosures is that there will be a growing number of REO (real estate owned by lender) sales in the near future, further undermining the prospects of price recovery in an already soft market,” said Nima Nattagh, TRW REDI’s market analyst.

The largest increase in foreclosures was recorded in Los Angeles County followed by Orange County, while in the Inland Empire foreclosures rose by less than the overall average for the five-county Southern California region.

The TRW REDI report notes that current foreclosure levels reflect financial difficulties experienced by property owners a few months ago. From the time that a mortgagor defaults on a loan, it takes at least five months before a lender takes back the property.

TRW REDI Property Data monitors real estate transactions from public record documents in more than 300 counties nationwide and provides information to lenders, title companies and appraisers.

Southland Foreclosures

Jan.-May, Dollar Jan.-May, Dollar Percent 1992 Amount 1993 Amount Change No. (mil.) No. (mil.) in No. Los Angeles 4,388 $1,238.0 8,703 $2,476.7 98.3% Orange 1,059 $407.7 1,960 $562.4 85.1% San Diego 1,341 $408.6 1,820 $441.1 35.7% Riverside 1,563 $331.7 2,669 $526.9 70.%8 S. Bernardino 1,617 $258.4 2,698 $399.9 66.9% Total 9,968 $2,644.4 17,850 $4,407 79.1%

SOURCE: TRW REDI Property Data