Report Says Home Values Leveling: But Delinquent Mortgages Loom Ever Larger in Foreclosure Calculations

Wednesday, July 01, 2009 8:11 AM

The tier of prices below $267,500, where bank-owned foreclosures are concentrated, fell at a 20 percent rate, an improvement from an annualized decline of 32 percent over the prior 18 months.

Feinberg said he was looking in the $300,000 to $400,000 range. He ended up paying about $300,000, leaving himself a bit of flexibility to buy furnishings and find a roommate.

"It definitely seems to have worked itself out," he said.

The market's balance could shift yet again if foreclosure numbers rise again, which many analysts say is probable.

The latest data from First American CoreLogic showed 5.7 percent of borrowers at least 90 days late on mortgage payments in San Diego County in April, separated from foreclosure only by lenders' backlogs, government-imposed barriers to foreclosure, or banks' own efforts to lighten the payment burdens.

Fully 13 percent of borrowers in neighboring Riverside County were at least 90 days late.

San Diego housing analyst Ramsey Su said even successful efforts to modify loans are likely to have only a minimal impact.

About 33 percent of U.S. mortgages modified in the first three months of this year were already delinquent by March 31, the Office of the Comptroller of the Currency reported Tuesday. More than 59 percent of mortgages modified in the first three months of 2008 were delinquent 12 to 15 months later, according to the agency's report.

"When are they going to stop wasting time and money with those modifications?" Su wrote in a memo Tuesday. "Not only is the system broken, every intervention is making it worse."

Call staff writer Chris Bagley at 760-740-5444. Read his blogs at bizblogs.nctimes.com.

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