Wednesday, August 02, 2006

Mortgage Defaults Spike, But Don't Bet On A Crash...Yet

The latest DataQuick numbers show that mortgage defaults are strongly on the rise, but note that despite the sharp increase in defaults, overall foreclosures are still below their 14-year average.

In the Bay Area, 2,910 homeowners received default notices from their lenders for the April-to-June quarter, up 37.1 percent from 2,123 notices in the same quarter a year ago, according to DataQuick, a La Jolla (San Diego County) real estate research company. That increase is the highest since the first quarter of 2001, when there was a 46.5 percent rise.

The swell was bigger statewide as 20,752 default notices were sent out -- up 67.2 percent from the same quarter in 2005 and the highest increase for any quarter since DataQuick began tracking foreclosures 14 years ago.

DataQuick analyst Andrew LePage said the current foreclosure figures are still below the historical norm. On average, lenders have filed 32,762 notices each quarter for the past 14 years, according to the research firm.

Of course, this isn't license to stop worrying, since DataQuick's analysts seem to think that this surge wasn't triggered by interest rate adjustments, but rather simply from the lack of price appreciation.

"We hear a lot of talk about rising payments on adjustable-rate loans triggering borrower distress," said DataQuick President Marshall Prentice. "While there's no doubt some of that is going on, as far as we can tell the spike in defaults is mainly the result of slowing price appreciation. It makes it harder for people behind on their mortgage to sell their homes and pay off the lender."

Once interest rate adjustments start to kick in, the trend may intensify. No one can say whether we'll see a soft landing (e.g. nominal prices remain stable but real prices decline) or a crash, but I wouldn't make any big Bay Area real estate investments right now.

Funniest Steve Jobs Humor Site Ever

In the grand satirical tradition of The Darth Side comes The Secret Diary of Steve Jobs.

This is one of the funniest things ever. I'm surprised Steve hasn't had his army of lawyers take it down yet. Get it while you can!

Speaking of John Doerr

Do you realize he's now got a company called "My Asshole"???? Seriously. Check it out here. And like, okay, I see the accent mark, but whatever, I just hope it's not a category name next time Sean Connery is on Celebrity Jeopardy. And come on. Do you mean to tell me of all the possible names in the world, they couldn't come up with something that every teenage boy in the world wouldn't immediately make into a joke? Like did nobody on the team kinda look at the name and go, like, Uh, hey, dudes, we might have like a problem here or something. My theory is that they hired a consultant to develop the name and actually paid a boatload of money for it, and that the consultant was somebody who got burned by KP on some other deal, like cheated out of some shares on the Google IPO or something, and this was their way of getting revenge. Anyhoo, on the way out of the Clinton meeting I'm walking out with T.J. Rodgers, who by the way is a total right-wing dick but also a totally great dude, and I couldn't resist, since Doerr was standing there all shattered cause he really really wants to be Secretary of State or something. So I go, Hey, John, how's that company MyAsshole working out? He shakes his head and goes, Steve, it's pronounced mee-ah-soh-lay. And I go, Seriously? Man cause it looks just like MyAsshole. I thought maybe it was a spin-off from MySpace or something. And T.J. goes, Yeah, is Ben still the CEO there? Ben Dover? Or is that pronounced Ben Do-VAIR? Doerr just smiles his tight little weasel smile and goes, Thanks for coming, guys. And when I got to the JobsMobile, no lie, somebody had keyed my door. Dick.

Many thanks to Vinnie for turning me on to this!