Foreclosures soar in California

The Los Angeles Times Reports:

A sagging real estate market and tighter lending standards are exacting a growing toll on Californians, forcing them from their homes in record numbers, figures released Tuesday show. Foreclosures soared to 17,408 for the three months ended June 30, an increase of 799 percent from the same period last year. The current rate handily exceeds the previous foreclosure peak set in 1996, when the state was in the final throes of six-year slump. Separately, Countrywide Financial Corp. — the nation’s largest mortgage lender — reported a sharp rise in delinquencies, even among customers with good credit. That sent shivers down Wall Street, helping to trigger a 226-point plunge in the Dow Jones industrial average. Although a relatively small fraction of homeowners face eviction, the concern is that a flood of foreclosures will further weaken housing prices — and make people less willing to spend money.

Because to the bad news from the housing sector there seems to be a growing consensus that the economy is headed for a recession, or at the very best a slow down.