Lots of luck. L.A. County had a modest 5.9 percent increase in fourth-quarter mortgage default notices compared with a year earlier, but much of that tempering could be due to a new state law in which lenders are required to at least make an effort to keep borrowers in their homes. The law went into effect in September, when filings really started to slow. By December, the numbers began picking up, according to Dataquick. The $64 question is whether the pickup is coming from defaults that had been delayed from earlier in the year or simply a new wave of foreclosure activity (a notice of default is the first step in the process). Most filings are still concentrated in the inland areas, where the combination of cheaper home and availability of subprime loans helped fuel the current disaster. This indicates that the problem has not yet moved into the more established, higher-priced markets. Of course, that’s not to say it won’t, especially if we see more layoffs among higher-wage workers. From the Dataquick release:

Most of the [Southern California] loans that went into default last quarter were originated between October 2005 and January 2007. The median age was 29 months, up from 21 months a year earlier. More than three million home loans were originated in 2006. That dropped to two million in 2007, and 1.1 million last year. On primary mortgages, California homeowners were a median five months behind on their payments when the lender filed the notice of default. The borrowers owed a median $12,867 on a median $351,000 mortgage.

NOTICES OF DEFAULT (2008Q4, % change from 2007Q4)
Los Angeles 14,410 +5.9%
Orange 4,481 +4.8%
San Diego 5,543 -9.9%
Riverside 9,151 -7.7%
San Bernardino 7,437 +2.0%
Ventura 1,308 -13.0%

Source: Dataquick