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Mortgage troubles move upward
Financing woes hurting even higher-income homeowners.
By Zain Shauk
Regional foreclosure filings surged 63% in 2009, tripling the increases seen in California and the nation as mortgage trouble rippled into previously unaffected areas, according to a real estate report released Thursday.
The 3,325 foreclosure filings in Burbank, Glendale, La Crescenta, Montrose and La Cañada Flintridge were up from a total of 2,044 in 2008, according to data prepared for the Leader by real estate tracking firm RealtyTrac.
Statewide, foreclosure filings jumped 21% in 2009. National figures reflected a 21% increase from the year before, the Irvine-based firm said.
The jump in regional figures was led by a more-than-two-fold increase in La Crescenta filings, including notices of default, trustee sale and foreclosure.
A total of 412 La Crescenta homes received one or more notices in 2009, up from 188 the year prior, according to RealtyTrac.
The next highest increase was in La Cañada Flintridge, where total filings jumped 90%, according to the data.
Foreclosure-related filings in Glendale grew by 58%, and in Burbank 52% more homes received the notices last year than in 2008, according to the report.
The large increases in filings, compared with California and the nation, indicate that homeowners who previously were able to weather economic hardship struggled with mortgage payments in 2009, said Daren Blomquist, a spokesman for RealtyTrac.
“It seems like forces are spreading to higher-priced markets, as well as they’re spreading because unemployment is very high almost across the board nationwide,” Blomquist said.
While many homeowners may have faced more hardship in 2008, the effects of the economic slide may have set in slower for homeowners in more affluent areas, like La Cañada Flintridge, said Bruce Ackerman, president and chief executive of the Valley Economic Alliance.
“I think the recession is hitting everybody,” Ackerman said. “It’s just taking a little bit longer on some of them. Somebody who’s got a higher income, typically they’re going to have a little bit more in savings so they’re going to have a little bit more staying power, but eventually it’s going to run out.”
Home prices throughout the region are typically higher than other neighboring communities, and many are inhabited by workers with high incomes, but the ripple effect of high unemployment was unavoidable, said Marcella Theisman, a real estate agent for Sundance Realty in La Crescenta.
“I don’t know if it’s a delayed issue because they’re sort of the white-collar workers,” Theisman said of homeowners who have had trouble with their financing.
Many of them work in entertainment industry-related businesses, which have suffered as local production activity slowed and fewer projects were in the works over the last year.
The large annual increases in regional foreclosure notices came after a fourth quarter in 2009 when the amount of filings fell by 25%, according to RealtyTrac.
But that drop-off was not an indication of a recovery, Blomquist said. Federal efforts to help homeowners with their mortgages has left many waiting to work through a process that might still leave them in doubt of covering their payments, he said.
A growth in expected foreclosures is also on the horizon, with many mortgages that began at low “teaser” rates set to jump this year, real estate experts say.
“We do believe the foreclosure activity is getting closer to peaking, and we’re projecting that will happen sometime at the end of 2010 and maybe the beginning of 2011,” Blomquist said. “But we don’t think we’ve reached a true peak yet, even after the downward trend in the fourth quarter [of 2009].”
The 3,325 foreclosure filings in Burbank, Glendale, La Crescenta, Montrose and La Cañada Flintridge were up from a total of 2,044 in 2008, according to data prepared for the Leader by real estate tracking firm RealtyTrac.
Statewide, foreclosure filings jumped 21% in 2009. National figures reflected a 21% increase from the year before, the Irvine-based firm said.
The jump in regional figures was led by a more-than-two-fold increase in La Crescenta filings, including notices of default, trustee sale and foreclosure.
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The next highest increase was in La Cañada Flintridge, where total filings jumped 90%, according to the data.
Foreclosure-related filings in Glendale grew by 58%, and in Burbank 52% more homes received the notices last year than in 2008, according to the report.
The large increases in filings, compared with California and the nation, indicate that homeowners who previously were able to weather economic hardship struggled with mortgage payments in 2009, said Daren Blomquist, a spokesman for RealtyTrac.
“It seems like forces are spreading to higher-priced markets, as well as they’re spreading because unemployment is very high almost across the board nationwide,” Blomquist said.
While many homeowners may have faced more hardship in 2008, the effects of the economic slide may have set in slower for homeowners in more affluent areas, like La Cañada Flintridge, said Bruce Ackerman, president and chief executive of the Valley Economic Alliance.
“I think the recession is hitting everybody,” Ackerman said. “It’s just taking a little bit longer on some of them. Somebody who’s got a higher income, typically they’re going to have a little bit more in savings so they’re going to have a little bit more staying power, but eventually it’s going to run out.”
Home prices throughout the region are typically higher than other neighboring communities, and many are inhabited by workers with high incomes, but the ripple effect of high unemployment was unavoidable, said Marcella Theisman, a real estate agent for Sundance Realty in La Crescenta.
“I don’t know if it’s a delayed issue because they’re sort of the white-collar workers,” Theisman said of homeowners who have had trouble with their financing.
Many of them work in entertainment industry-related businesses, which have suffered as local production activity slowed and fewer projects were in the works over the last year.
The large annual increases in regional foreclosure notices came after a fourth quarter in 2009 when the amount of filings fell by 25%, according to RealtyTrac.
But that drop-off was not an indication of a recovery, Blomquist said. Federal efforts to help homeowners with their mortgages has left many waiting to work through a process that might still leave them in doubt of covering their payments, he said.
A growth in expected foreclosures is also on the horizon, with many mortgages that began at low “teaser” rates set to jump this year, real estate experts say.
“We do believe the foreclosure activity is getting closer to peaking, and we’re projecting that will happen sometime at the end of 2010 and maybe the beginning of 2011,” Blomquist said. “But we don’t think we’ve reached a true peak yet, even after the downward trend in the fourth quarter [of 2009].”
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