How will the Golden State deal with California foreclosures at present and in the future? This question is much easier to ask than to answer, of course, especially when it comes to such a diverse state like California. It’s been rocked by the recession as well as structural issues with its real estate markets, for sure, and any forecasting will need to take a look back to see how it all began in the first place.

Foreclosures in California, much like foreclosures elsewhere, occur when owners of property or real estate can no longer make the payments on their property or real estate. As with much of the rest of the country, many people bought into California homes with the expectation that they’d soon make a profit from the sale of those homes, and they were right for quite some time.

Unfortunately, the recession that has hit the entire nation first broke out in California a few years ago and caught many home owners out there unawares. Sadly, many of these homeowners were sitting on initially-low mortgages that were tied to interest rate adjustments that soon led to monthly payments going through the roof.

Equally as sadly, many of these people bought much more home than they really couldn’t afford, with the expectation that they’d be out of those homes before their original mortgages adjusted upwards. Most times, the gamble would pay off in they’d be gone and into an even bigger home but with a significant profit on the sale of the original home in their pockets.

Naturally, like any boom-and-bust cycle (and real estate is no more immune to it than any other aspect of the broader economy) the bust eventually occurred. Add in the fact that cultural biases against going into foreclosure seem to be melting away, and it’s easy to see how the rate of CA foreclosures soon begin to take off with a vengeance that frightened some economists.

The state of California, which already was restricted from taking advantage of much of that boom due to Proposition 13 — an initiative passed several decades ago which restricted the rate of taxes that could be excised on a property — was hurt badly by the decline in home values and the increase in foreclosures. And the state is still struggling with what to do about the CA foreclosures rate.

The first thing that the state probably should try to do is stabilize the foreclosure rate and prevent it from increasing any further, and the federal government has been helping in that regards with a number of innovative programs that might help. Getting the word out to many California property owners, though, has been tough as has been getting them to forestall or put off foreclosure as a first, rather than last, resort.

It would seem that the rate of CA foreclosures is almost a natural side effect of the speculative real estate activity that had been occurring for at least a decade out in California. Unfortunately, the state has only a few tools it can use at present due to its own budgetary issues brought on at least in part by Proposition 13. Hopefully, though, it’ll be able to do something more comprehensive in the near future.

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