October 21, 2011 (Shirley Allen)
After a promising second quarter in which foreclosure activity in California reached a four year low, default notices in the third quarter of 2011 bounced back to the previous levels seen at the beginning of the year and at the end last year according to real estate information provider DataQuick.
A total of 71,275 Notices of Default (NoDs) were recorded in the third quarter of 2011, up 25.9 percent from the 56,633 NoDs recorded in the second quarter of this year but down 14.4 percent from the 83,261 NoDs recorded in the same quarter of last year.
The number of NoDs in the second quarter of this year was the lowest recorded in any quarter since 53,493 were recorded in the third quarter of 2007. The record amount of NoDs ever recorded were 135,431 in the first quarter of 2009.
In the first quarter of 2011, lenders filed 68,239 NoDs and in the fourth quarter of 2010 lenders filed 69,799 NoDs.
Most of the loans that are still going into default today originated during the 2005 – 2007 time period and are generally serviced or owned by institutions that did not make the original loan.
“Figuring out what’s actually going on when it comes to foreclosures can be a logistical nightmare. In each case there are at least six or seven different legal entities contending with each other, each with a different agenda and timeline: The original lender, the homeowner, the current owner or owners of the loan, the servicing institution, the outfit doing the actual foreclosing, and the county recorder’s office,” said John Walsh, DataQuick president.
Low cost areas with a median sales price of under $200,000 continued to carry the brunt of foreclosure activity in the third quarter with 11.0 default notices per 1,000 homes, up from 8.7 NoDs per 1,000 homes in the second quarter.
Homes in zip codes with $800,000 or greater median home prices only received 2.8 default notices per 1,000 homes, which was up from 2.4 NoDs per 1,000 homes in the second quarter.
The state average in the third quarter was 8.1 default notices per 1,000 homes, up from 6.4 NoDs per 1,000 homes in the second quarter.
Counties where mortgages were least likely to default were San Francisco, Marin, and San Mateo. The counties that experienced the highest level of defaults were Sacramento, Madera and Stanislaus.
Distressed properties sales made up 52.0 percent of all re-sales in California during the third quarter of 2011, up from 53.0 percent in the second quarter.
Foreclosure re-sales accounted for 34.2 percent of the quarter’s resale activity, down from 35.6 in the previous quarter, while short sales made up about 17.8 percent of all re-sales for the quarter, up from 17.4 percent in the second quarter.
California homeowners were a median eight months behind on their payment when the lender filed the Notice of Default on their primary mortgage.
The average amount of time that it took to foreclose on a home after a NoD was received was 9.9 months, down slightly from 10.0 months from the second quarter of 2011 and up from 8.7 months in the same quarter of 2010.
“The way it looks right now, it’s reasonable to expect default filings to run at a somewhat higher level than we saw earlier this year. Obviously, some lenders and loan servicers have begun to plow through their backlogs of delinquent loans more aggressively,” Walsh added.
Tags: California, defaults, notice of default, NoD, bank policy changes, legal challenges, politics, median sales price, distressed properties, foreclosures, short sales