Foreclosure Rates Seen Rising in CA, NJ

Foreclosure rates are likely to climb in California and New Jersey as a result of rising interest rates, according to an online seller of foreclosed property.Foreclosures.com, Fair Oaks, Calif., says the recent trend toward "steep declines" in California foreclosure activity is likely to be reversed soon. "The Southern California markets stayed hot much longer than anyone thought they would, and low interest rates were the reason," said Alexis McGee, president of Foreclosures.com. "Now that's over." Ms. McGee cited data from Loan Performance Inc., San Francisco, indicating that more than twice as many loans in Los Angeles were seriously delinquent than had gone into foreclosure. "That's an early warning signal of problems to come," she said. Meanwhile, the company predicted rising mortgage defaults in New Jersey despite improving economic conditions in surrounding areas. "The problem is that Northern New Jersey and Manhattan are joined at the hip," Ms. McGee said. "New York City's persistent recession has spread across the Hudson to plague homeowners in the Garden State." The company can be found online at http://www.foreclosures.com.