Valley foreclosures spike

Foreclosures soared an annual 246.8 percent in the greater San Fernando Valley during July as trouble with adjustable rate loans continues to mount, a university research center said Tuesday. Gregory J. Wilcox in the Daily News.

"This is an ominous sign," said Daniel Blake, director of the Economic Research Center at California State University, Northridge. "There are a lot of possible (loan) resets out there, and we don't know the extent of them."

The foreclosure spike is happening to a great degree because many homeowners with spotty credit took out adjustable rate loans with low initial payments and they are not able to afford higher payments with their interest rate increases.

And credit-worthy buyers who extended their finances with adjustable rate loans so they could buy better homes are also encountering trouble, said Blake.