San Francisco Bay Area foreclosures skyrocket

Homes lost to foreclosure highest in two decades
Home.com lists over 500 vallejo homes in $100K to $400K bracket (7/26/07)
Record high number of mortgage default notices 7696, vs. 2910 previous year. Last peak was Q4 1996
2nd quarter 2206 trustee deeds, compared to 258 in previous year.
Increasing number of defaults resulting in foreclosure, 45%. USed to be just 12%
- Softening real estate market making it more difficult to escape by selling
- Dropped price means sale price may not cover mortgage
"A combination of little or no appreciation, and in some markets, depreciation, and some pretty funky financing that has come back to haunt some borrowers. People used risky financing to stretch beyond their means. Now, in all likelihood, they're either experiencing payment shock because of a reset from a teaser rate, or they see (high payments) coming and are thwoing in the towel early, especially if they think (home) prices might go down more. Folks borrowed beyond their means in larger numbers because of hor common creative financing become.", Andrew LePage, DataQuick Information Systems.
- Especially risky loans:
  - higher cost subprime loans to people with poor credit
  - subprime loans to people with no money for a downpayment

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