Home loan defaults and foreclosures spiked to unprecedented highs across the Sacramento region, La Jolla-based property researcher DataQuick Information Systems reported Friday. Statewide numbers also broke records.

At least 6,638 homeowners in El Dorado, Placer, Sacramento, Sutter, Yolo and Yuba counties received notices of default from their lenders during the three-month period, said DataQuick. Lenders typically issue default notices – the first step toward the formal foreclosure process – when a borrower falls two or three months behind on the mortgage.

The default notices are gaining on sales. DataQuick said 7,791 new and existing homes closed escrow during the same period in those counties.

More bad news for the Bay area and California:

• In July, August and September, 2,772 home owners lost their houses to banks in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties, DataQuick reported.

• Statewide, 24,209 homeowners lost their homes during the quarter, the firm said, the highest number since it began keeping statistics in 1988.

• Sacramento County accounted for 74.5 percent of third-quarter defaults in the six-county region, with 4,947. It also accounted for 74.5 percent of foreclosures in the eight-county area, with 2,065.

• One south Sacramento ZIP code – 95832, in the Meadowview area – ranked among the most troubled in California for its defaults, alongside 95330 in Lathrop in San Joaquin County and 92571 in the Riverside County city of Perris.

• 27 percent of the homes sold during September in Sacramento County were foreclosure properties.

• Most of the loans that went into default were for homes bought or refinanced between July 2005 and September 2006, the firm reported.

Risky loans the culprit

Last year about 27 percent of homebuyers in El Dorado, Placer, Sacramento and Yolo counties used the riskier subprime loans, according to a Bee analysis of federal Home Mortgage Disclosure Act data released this month.

DataQuick said half of California's record 72,571 third-quarter defaults were in the Central Valley and Riverside and San Bernardino counties, home to thousands of homes financed with easy but risky lending terms that required no down payments.

"There are horror stories of people in these situations, especially low-income people who got in over their heads," said Rachel Iskow, executive director of the Sacramento Mutual Housing Association, which works with low-income homeowners. "Many are working two jobs each, one full time and one part time, to try to catch up with the mortgage."

Huge inventory for sale

There are about 21,000 new and existing homes now for sale in El Dorado, Placer, Sacramento, Sutter, Yolo and Yuba counties.

With slow sales come more downward pressure on home values. Median prices have fallen by as much 21 percent from their 2005 highs in Placer and Sacramento counties.

Realtor,Adams, says bank-owned inventory will keep growing, in part because fewer owners are escaping foreclosure after going into default. A year ago 80 percent of defaulting homeowners were able to refinance, bring payments current or sell their house. DataQuick said only about 46 percent of defaulting homeowners now are escaping foreclosure.

Still, a decent economy is keeping Sacramento off a list of the nation's riskiest real estate markets, said Sam Khater, senior economist at Santa Ana-based First American CoreLogic, which evaluates mortgage risk. Topping that list are places like Detroit, Grand Rapids, Mich., and Cleveland.

Source: http://www.sacbee.com/103/story/456583.html