Californian repossessions up 327%

California has seen the number of home repossessions rocket by 327 per cent over the last year.

Some 500 hundred properties a day are now entering foreclosure, in the clearest indication yet the credit crunch still has a good distance to run.

The figures, which were collected by America analysts DataQuick, show the number of foreclosures totalled 47,171 during the first quarter of 2008.

This represents a 48.9 percent increase from a total of 31,676 in the previous quarter, and jumped 327.6 per cent from 11,032 in first quarter 2007.

Following the release of the findings DataQuick president Marshall Prentice told the Los Angeles Times: "The main factor behind this foreclosure surge remains the decline in home values.

"Additionally, a lot of the 'loans-gone-wild' activity happened in late 2005 and 2006 and that is working its way through the system. The big 'if' right now is whether or not the economy is in recession.

"If it is, the foreclosure problem could spread beyond the current categories of dicey mortgages, and into mainstream home loans."

The global credit crunch, which has seen a dramatic restriction in default notices - which could mark the beginning of the foreclosure process if homeowners are unable to recover – also increased sharply, but not as rapidly as outright foreclosures.

According to a DataQuick statement homeowners received some 113,676 default notices in the first quarter, up 143 per cent from a year ago.

The level was the highest since at least 1992, when DataQuick began collecting statistics.

And those entering the default process are now also less likely to rectify their situation. DataQuick finds an estimated 32 per cent emerge from the foreclosure process by bringing their payments current, refinancing, or selling the home and paying off what they owe.

A year ago it was about 52 per cent.

Chris O'Toole