The California press reacts to the Dataquick release. "Foreclosure activity across California soared by its biggest margin in 14 years during the second quarter in response to diminishing price appreciation, an industry tracker said Wednesday. During the April-through-June period, lenders sent 20,752 default notices to homeowners in the state, up 67.2 percent from the year-ago period and up 10.5 percent from the first quarter, said DataQuick Information Systems."

"That's the biggest annual quarterly increase since La Jolla-based DataQuick began mining these numbers in 1992."

"In Los Angeles County, activity increased 45.3 percent to 4,586 default notices. In Ventura County, activity increased 80.8 percent to 452 notices. In Southern California, activity increased 69.5 percent to 12,222 notices."

The LA Times. "'This is a key measure of financial distress,' DataQuick analyst Andrew LePage said. 'If it continues long enough it could impact home values.' The number of foreclosures in the state is rising too. The second-quarter total was 1,901, according to DataQuick, a 215% jump over the 604 in the same period last year."

"How bad things are, and how bad they'll get, remain a matter of dispute. Analyst Sean Snaith has changed his metaphor for the state's real estate market from a souffle (delicate, full of hot air) to a crepe (less exciting but less likely to collapse)."

"Patti Hale, a San Diego agent, had a succinct summary of the market: 'It stinks.'"

"Mortgage default notices in San Diego County nearly doubled this spring to the highest figure in the past seven years, according to a report."

"Arnie Levine, a (foreclosure) broker in Mission Valley, said he has alerted his clients to about 400 houses and condominiums on the market that have been foreclosed on or been hit with notices of default. They range from a 42-year-old, 588-square-foot home on 50th Street in San Diego, priced at $159,000, to a 14-year-old, 3,671-square-foot home in El Cajon with an asking price of $1.2 million."

"'It's bad for the people (selling) but good for our clients, because they're looking for foreclosures,' Levine said."

"Roxanne Carr, of the Mortgage House in San Luis Obispo, said she’s not worried that local homeowners are getting into serious trouble making their mortgage payments. But she acknowledged that homebuyers should take care when choosing creative financing options that could leave them paying more per month than they anticipated."

"'People have to be careful,' she said. 'It’s (a mortgage) a big expense.'"

"Every Bay Area county except Marin experienced an increase in the notices of default on houses and condos during the one-year period ending June 30, according to DataQuick's figures. The increase in the Bay Area was 37 percent. Default notices increased 74 percent in Napa County; 65 percent in Solano County; 53 percent in Sonoma County and 51 percent in San Mateo County."

"Dennis Kelly, of Coldwell Banker in San Rafael, said DataQuick's figures sound 'extreme,' but he said he has recently noticed anecdotal evidence of some people in Marin County falling behind their mortgage payments, especially those with 100 percent financing of their mortgage. He said the default notice rate in Marin County could increase."

"Sutter County led the state with a 229.4 percent increase over the same time last year. Placer County, with 276 notices in the second quarter, was up 126.2 percent. That figure, up from 239 during the first quarter, was the highest since 1998. Placer County's record is 322 notices in 1996."

"Sacramento County recorded 1,352 notices of default during the second quarter of 2006, up 108.6 percent from 2005. 'We're seeing more people calling and coming in and wanting to know what to do,' said Pam Canada, of Sacramento-based Neighborworks Homeownership Center. 'They're in over their heads basically and can't be bailed out with refinancing. The real heartbreaking part is there's not a lot of solutions.'"

"Many have mortgages that represent more than 100 percent of their home's value, she said. Others face rising monthly payments with adjustable-rate mortgages and don't have enough equity in the home that would allow them to move to a different mortgage, Canada said."

"'In San Joaquin County, the number of foreclosure notices was up almost 90 percent from a year ago, rising from 318 in the second quarter of 2005 to 604 in this year's last quarter. Ron Cutler, broker-owner of Suntec Financial, Stockton, said he believes there's a nationwide problem developing with foreclosures resulting from questionable mortgage loan deals that allowed people to buy in a pricey housing market."

"Some mortgage brokers and lenders put people into adjustable-rate mortgage loans with introductory payments as low as a 1.25 percent interest rate the first two years, he said. When those ARMS kicked in with current higher interest rates that often doubled the house payment, many of those home buyers found themselves going into mortgage default, he said."

"'It's evident those people were getting into homes that they basically shouldn't have qualified for,' he said. 'Now the market is starting to change. They're trying to sell their house, and that's not happening either when you have a large amount of houses on the market.'"

"Mortgage brokers and lenders had no business doing those kinds of deals, he said. 'I believe there's been a lot of fraud committed already in the mortgage industry, and it's beginning to come out,' Cutler said."