<p>Click <a href="https://www.blogger.com/comment.g?blogID=2797158966099672113&postID=3730565634488649577">here</a> for all the OC Register headlines and the free portion of the article from 1987 to 1993.</p>
<p>Here is one of my favorites:</p>
Analysts say foreclosures are economic dead weight
May 5, 1991
Byline: Andre Mouchard
The Orange County Register
Foreclosures are up in Orange County, and economists believe the trend is weighing down the county's long climb out of recession.
Through the first three months of this year, about 800 local properties were given dates for trustee sale, the final step in foreclosure. An additional 2,240 properties were listed in default, indicating that the owners were 30 to 90 days late on their mortgage payments.
In comparison, fewer than 650 properties were listed in foreclosure during all of 1990. The year before, about 394 properties were put in foreclosure.
Despite the increase in defaults, most economists and mortgage experts are bullish on the county's housing market, saying the foreclosure boom is unusual and probably will abate by mid-1992.
But these same experts say the current situation isn't good.
Foreclosures, they note, work on the county's economy like a school of hungry piranhas, with each default taking a tiny bite out of every sector. Among the hardest hit are retail sales, auto sales and, ironically, home prices.
"Right now, one house out of every 10 that's on the market is owned by somebody in delinquency or who is late on their (mortgage) payment," said Kurt DeMeire, president of County Records Research, a Huntington Beach firm that tracks foreclosures.
"That definitely is helping to keep house prices from rising," he added.
But the biggest losers in any foreclosure boom are mortgage lenders -- banks, credit unions, savings and loans and any company that guarantees those loans.
"It's an alarming trend," said John Burns, regional vice president for General Electric Capital Mortgage Insurance Corp. in Irvine, a subsidiary of Connecticut-based General Electric Corp.
"We feel the top of the real-estate market was mid-1989, and that home prices in some pockets of the county have dropped 2, 10 and 30 percent," Burns said.
He added that when home prices drop, a higher number of homeowners owe more on their mortgage than their house is worth, so they can't sell their home to pay off their debts.
"When (a long-term decline) happens to home prices, you're going to have a lot of foreclosures, and they're going to hurt."
In a typical foreclosure, Burns' company stands to be among the hardest hit. Mortgage guarantees are required by a bank or other mortgage lender when the down payment is less than 20 percent of the total sale price of the house.
Burns said his company has been hurt by Orange County
foreclosures, although he said the traditional strength of the market has kept damage to a minimum.
"There are still a lot of investors who'll buy the (foreclosed) house in Orange County before it gets all the way through to us," he said. "We hope that continues."
More will be known about the overall effects of foreclosures later this year. Essie Adibi, an economics professor at Chapman College, hopes to create an economic model that will predict forclosure rates in Orange County.
"We've generally thought of foreclosures as an effect, not a cause, of a troubled economy," Adibi said.
"But in the past year, banks and others have asked us if there is any way of charting foreclosures," he said. "We're hoping to come up with something that shows that."
