Property foreclosures surpass full-year 1991 level.

Hancock Park/Park La Brea area takes biggest hit

Foreclosures in Los Angeles County for the first eight months of 1992 have already exceeded the full-year 1991 total number of foreclosures by 18 percent, according to data from TRW-REDI Property Data in Riverside.

Between 75 and 80 percent of the soaring local foreclosures this year have involved residential properties, said Nima Nattagh, a market research analyst for TRW-REDI.

According to TRW-REDI, there were 1,462 more foreclosures in the first eight months of 1992 compared to all of 1991. The total value of foreclosed property increased to $2.2 billion, from $1.9 billion in 1991.

The data becomes even more dramatic when considering it includes only those properties that have actually been taken back by lenders. Not included are hundreds of additional homeowners who have received default notices.

A lender issues a notice of default when a homeowner misses a house payment. Upon receipt of the notice, the homeowner has three months to catch up on mortgage payments before the lender forecloses.

In the first eight months of 1992, lenders foreclosed on 186 properties in the Hancock Park/Park La Brea area, worth $151.5 million, the largest dollar amount of any area in L.A. County.

The Lancaster/Palmdale area came in second, with 931 foreclosures totaling $145.3 million. The Hollywood/West Hollywood/Los Feliz area was third, with 210 foreclosures totaling $139 million. Beverly Hills was fourth, with 86 foreclosures totaling $115.7 million. And Long Beach was fifth, with 428 foreclosures totaling $81.7 million.

Of the 89 areas in L.A. County surveyed for foreclosures, 55 had more foreclosures in the first eight months of 1992 than in all of 1991.

"The foreclosures are mirroring job loss in the county," said Jack Kyser, chief economist for the Los Angeles County Economic Development Corp.

He said 208,000 jobs were lost in L.A. County in 1991. He projects another 90,000 jobs will be lost in 1992 and 40,000 in 1993.

With foreclosures rising across all income strata -- from neighborhoods in Palmdale to Beverly Hills -- Kyser said it indicates that this recession is affecting everyone.

"What's so unique about this recession is that it's so democratic," he said.

He said neighborhoods surrounding aerospace plants are being especially hard hit because 78,000 aerospace jobs have been lost since January 1988.

Don Greenwood, president of Greenwood & Co., a real estate consulting and brokerage firm in West L.A., predicted there will be even more foreclosures next year.

He said people are concluding it is more beneficial just to stop making payments on their mortgage because the price of their homes has fallen as much as 30 percent. By letting the lender take over the home, Greenwood said, the homeowner can avoid having to pay a commission to a broker for selling the property.

Greenwood said a typical foreclosure involves someone who made a 20 percent down payment and had the bank finance the remaining 80 percent. He said a lot of people even had a bank finance 90 percent of the mortgage.

"All of a sudden you can't sell a house for more than the mortgage," he said. "You're not going to get anything out of it, so you just sell it back to the lender."

Adding to the job loss in the county, Greenwood said, is the fact that people are so highly leveraged and were taken by the notion that real estate in L.A. County would do nothing but go up.

"I was like many who believed that every time I put my name on a trust deed, I'd make money," said Greenwood. "That invariably happened every time."

But there was no basis to such blind optimism, he said. Much of the increase in real estate prices during the 1980s, he said, was due to outside influences, such as the influx of Iranians, Japanese and Arabs buying property.

Judy Frumkin, co-founder of Redloc Daily Journal, a company in Placentia that lists foreclosures, said she finds that many people are inflating their income to get a home loan and many do not include major expenses, such as car payments, when seeking to qualify.

"People are getting in over their heads, and they don't have the resources to get out of the situation," she said.

She added that 85 percent of the people going through foreclosures are just "hard-

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TABULAR DATA OMITTED

L.A. foreclosures ranked by percentage change in the dollar
amount of foreclosures from 1991*
Percentage gainers                             Change from 1991
Westchester                                               96.0%
Marina del Rey/Play del Rey                               87.8%
Santa Monica                                              80.0%
Hancock Park/Park La Brea                                 78.0%
Carson/Dominguez                                          69.9%
La Verne/San Dimas                                        69.4%
San Pedro                                                 61.2%
El Segundo/Hermosa Beach/Manhattan Beach                  58.7%
Walnut                                                    56.4%
Sherman Oaks/Van Nuys                                     56.2%