HOMEOWNERS SHOW SIGNS OF STRAIN FORECLOSURE ACTIVITY HIGHEST SINCE 1998.

Byline: GREGORY J. WILCOX Staff Writer

Foreclosure activity soared an annual 145.3 percent across California during last year's fourth quarter -- reaching its highest level since 1998, but still below average, an industry tracker said Wednesday.

During last year's final three months, lenders sent 37,273 default notices to homeowners, the most since the third quarter of 1998, according to DataQuick Information Systems.

Activity increased 36.9 percent from the 2006 second quarter.

``Most of that big jump is because the year-ago numbers were unnaturally low,'' DataQuick analyst John Karevoll said.

``We're jumping up, but we are nowhere near even the average, not to mention the severe problem we had back in the early 1990s.''

The report showed:

In Los Angeles County, 7,445 property owners received default notices, up an annual 113.9percent. The peak was 21,444 notices in the first quarter of 1996.

In Ventura County, 794 property owners received notices, up an annual 204.2 percent.

In San Bernardino County, 3,538 property owners received notices, up an annual 140.2 percent.

Statewide, activity peaked in first quarter 1996 at 61,541. An average of 33,615 notices of default, or NODs, have been filed quarterly since 1992, when DataQuick's NOD statistics begin.

A notice of default is the fist step in the foreclosure process.

``It's what we expected,'' said Jack Kyser, vice president and chief economist at the Los Angeles County Economic Development Corp. ``And since they are coming off low levels, that percentage increase looks pretty scary.''

DataQuick said another factor is in play. Most defaults occur a year or two after the loan was made, and the state is now in a period where the loan pool is at risk.

``And then there are those inventive loans that have been made the last few years, where qualifying involves assuming more risk. We're in the midst of an adjusting market right now, and we won't know until spring or summer if this is ominous,'' said Marshall Prentice, DataQuick's president.

Most of the loans that went into default in the 2006 fourth quarter were made from January 2005 to February 2006. The median age for the loans was 15 months.

On primary mortgages, homeowners were a median five months behind on their payments when the lender started the default process. And they owed a median $10,555 on a median $324,000 mortgage.

On lines of credit, homeowners were a median six months behind on their payments. Borrowers owed a median $3,582 on a median $60,000 credit line. However, the amount of the credit line that was actually in use cannot be determined from public records.

On a loan-by-loan basis, mortgages were least likely to go into default in Marin, San Francisco and Santa Clara counties. The likelihood was highest in Merced, Riverside and Tulare counties.

The company also noted that most homeowners emerge from the foreclosure process by bringing their payments current, refinancing, or selling the home and paying off what they owe.

Still, about 32 percent of homeowners who found themselves in default earlier in the year actually lost their homes to foreclosure in the fourth quarter. A year ago, it was 8percent.

Trustees deeds, or actual foreclosure sales, recorded on homes totaled 6,078 during the fourth quarter, up 76.9 percent from 3,435 for the previous quarter, and up 595.4percent from 874 for last year's fourth quarter. Foreclosure sales peaked at 15,418 in third-quarter 1996, and hit a low of 637 in the second quarter of 2005.

In Los Angeles County, actual foreclosure increased to 942 in the fourth quarter from 155 a year earlier. They peaked at 4,586 in the second quarter of 1996, the company said.

There are 7.87 million houses and condos in the state.

While foreclosure properties tugged property values down by almost 10 percent in some areas nine years ago, the effect on today's market is negligible, DataQuick reported.

Karevoll said it is impossible to tell which direction this foreclosure activity will head right now.

``It could level off sometime this summer, and I think the level off scenario is more likely right now.''

greg.wilcox(at)dailynews.com

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