California Leading U.S. Out of Housing Bust: Mortgages
California, the state that led the U.S. into the housing boom and bust with some of the most reckless subprime mortgage lending, is now leading the way out.
A plunge in new defaults in California helped push U.S. foreclosure filings to the lowest level in almost five years, according to RealtyTrac Inc., a seller of home-loan data. Across the country, 531,576 properties received notices of default, auction or repossession in the third quarter, down 13 percent from a year earlier and the lowest since 2007. One in every 248 households got a filing, RealyTrac said today.
California, the birthplace of subprime mortgage lending, saw an explosion of foreclosures thanks to such industry innovations as “no-doc” loans that required no proof of income. The state’s recovery is mirrored by U.S. home values that rose 1.2 percent in July from a year earlier, according to the S&P/Case Shiller index of property prices in 20 major cities. It was the second straight 12-month advance and the biggest jump for the real estate gauge since August 2010.
“We’re starting to see improvement in some of the hardest hit areas, strong demand, competitive bidding on properties and rising prices,” Sean O’Toole, chief executive officer of ForeclosureRadar.com, which tracks sales of foreclosed properties, said in a telephone interview.
The gains are moving in tandem with foreclosure declines as lenders control the flow of bank-owned homes that come to market, crimping inventory and pushing up prices, said Daren Blomquist of Irvine, California-based RealtyTrac. See the full story at www.businessweek.com.