The California press reacts to the foreclosure data. "First-quarter foreclosure activity in San Joaquin County hit the highest level in two years as the slow housing market made it tougher for owners to sell homes. San Joaquin County's foreclosure notices jumped nearly 30 percent year to year."

"A crunch over mortgage defaults hasn't shown up yet, although mortgage-related credit counseling inquiries have been increasing, said Richard Pittman, coordinator for a nonprofit counseling service in San Joaquin County. Many homeowners refinanced four, five or six times, using the fast-growing equity as sort of a piggy bank from which to pull cash, Pittman said."

"'So from that standpoint, the good days may be over,' Pittman said."

"In Santa Cruz County, 108 homeowners received notices of default in the quarter, according to Andrew LePage, a DataQuick analyst. That's a 61 percent increase from the first quarter of last year, when there were only 67 notices sent out, said LePage."

"DataQuick President Marshall Prentice said the hike was largely driven by the slowing of annual home price increases, which makes it harder for homeowners to sell their homes and pay off lenders."

"A rise in default notices would probably not directly influence home prices in Santa Cruz County, but it could contribute to the number of homes on the market growing, said (realtor) Gary Gangnes. 'If a lot of people are in default and they can't make the payments, the next thing is to try to sell the house,' said Gangnes. 'It would affect pricing if unsold inventory index gets abnormally high. If it gets to be a 12 months' supply, that could put downward pressure on prices."

"Economist Stephen Levy agreed the jump is not worrisome in itself but said it could be a sign of building stress in the housing market. He said he believes that many home owners will be at greater risk for foreclosure in the coming months, as teaser rates on the adjustable-rate or other riskier loans that helped fuel the recent real estate boom adjust to higher minimum payments."

"The percentage of East Bay buyers who opted for adjustable-rate mortgages increased from 3.4 percent in 2000 to 28.2 percent in 2005."

"An increasing number of Sacramento-area residents are behind in their mortgage payments, putting them on a track to foreclosure. 'We're definitely seeing the number of calls increase related to foreclosure," said Jennifer Harris, of Sacramento's Home Loan Counseling Center."

"She said people who stretched themselves too far to buy a house are seeing payments rise $150 to $200 a month and asking, 'What am I going to do?'"

"Many lack easy options to get themselves out of trouble, said Vicky Henderson, loan consultant in Sacramento. 'I can't tell you the number of people who call who want to finance into a fixed-rate loan, and I can't. They don't have the value,' she said."

The Washington Post. "A greater proportion of mortgage refinancers tapped their home equity for cash in the first three months of this year than in any other quarter in the past 15 years. About 88 percent of people refinancing their homes took out loans for at least 5 percent more than their original balances."

"'If you are watching and listening, the Fed is telling you interest rates are going to climb,' said Amy Crews Cutts, deputy chief economist at Freddie Mac."

"'Our policy of using our homes as our banks is bad public policy, and we need to think of the long-term implications of the debt we have. It's a homeownership economy where people don't really own their homes,' said Ira Rheingold, general counsel of the National Association of Consumer Advocates."

"Mahesh Desai decided that because interest rates were about to rise, it was time to refinance his house in Darnestown. 'I'm still going to have sticker shock in my next payment, but I've enjoyed lower rates for a while,' Desai said. 'Guess the party's coming to an end.'"

"His new rate is 6.625 percent, and the monthly payment will jump 72 percent. It is an interest-only loan, but he will be pressed to afford the new payment, even without paying down the principal. 'I'm going to work harder and sell more,' he said. 'I don't have a choice.'"