CA Notices of Default Almost Double in Month

For those of you that have been following the JMO Newsletter and now the JMO Blog you will recall that I've been saying that once the foreclosure moratoriums were lifted that we would begin to see a dramatic increase in foreclosures, providing a more accurate representation of the housing crisis. The article below refers to California state senate bill 1137. In the bill it required lender or other parties that took possession of properties subsequent to foreclosure to maintain the upkeep and aesthetics of the property or face fines of up to $1000 per day until they came into compliance. Clearly, the lenders have realized that with a average negative equity of $180,000 (just wait til the pay-option ARMS begin to recast!) and many homeowners failing to make payments for up to a year that foreclosing may be the only option to protect themselves. This means for those of us in the REO game, that even more inventory will become available in the near future.

CA Notices of Default Almost Double in Month

January 14, 2009

ForeclosureRadar has issued its California Foreclosure Report for December 2008 and year-end summary, noting that notices of default have rebounded from the stall caused by California State Senate Bill 1137, which it said temporarily slowed foreclosures by imposing new requirements on lenders. The Discovery Bay, Calif.-based website, says with 42,421 filings in December, notices of default are back to the record levels reached in the second quarter of 2008, nearly doubling the 21,557 notices recorded in November. In 2008, California saw 249,940 foreclosure properties sold at trustee sale auction, representing $107.8 billion in combined loan value. Of those properties 96.4% went back to the lender after no bid was received from a third party. For the year, there were a total of 437,955 notices of default filed, an increase of 56% over the 279,821 filed in 2007. Notice of trustee sale filings increased 122.9% over 2007 rising from 157,273 filings in 2007 to 350,514 filings in 2008. Properties sold at auction increased by 158% by volume, and 179% by combined loan value. Lenders took back a total of 241,093 properties, with a combined loan value of $103.9 billion, the report said. "While a number of lenders have announced significant loan modification programs to reduce payments to affordable levels, these plans fail to address the fact that the average foreclosure in California now has $180,000 in negative equity," said Sean O'Toole, founder of ForeclosureRadar.