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Record number of default notices sent

April 23, 2009 6:40:51 AM PDT
The number of default notices sent to California homeowners reached an all-time record during the first three months of this year. It's another sign that the mortgage crisis isn't slowing down any time soon.New numbers show 135,000 notices were sent out, which is an 80 percent increase.

A default notice is the first step in a foreclosure process.

According to Dataquick, a real estate tracking firm, the ongoing recession is a big factor, plus lenders are playing catch-up after a temporary lull in foreclosure activity.

Dataquick said a lot of risky loans were made in mid to late 2006, and the foreclosure process is now working its way through. 8.5 percent of the 3 million home loans made in California that year have ended up in default.

Fewer default notices went out during the end of 2008 after a new state law took effect requiring lenders to help keep troubled borrowers in their homes. That has lead to a 6 percent drop in the number of foreclosures so far this year.

L.A. County has seen the largest increase compared to a year ago. Nearly 28,000 notices went out from January to March this year, which is a 37 percent increase.

In Orange County, 8,427 notices went out, which is a 19 percent increase, and in Riverside County, 16,906 notices went out, which is a 12.5 percent increase. In San Bernardino County, 13,276 notices went out, which is a 19 percent increase, and in Ventura County, 2,648 notices went out, which is a 21 percent increase.

Foreclosure sales now account for more than half of the sales activity in California.