Foreclosure starts decline in California
January 13, 2011
• December sees drop over year-earlier pace
• ‘Servicers appear to have their hands full’
The number of homes getting slapped with the first step of the foreclosure process declined across California – including the Central Valley – in December 2010 compared to a year earlier, according to figures compiled by ForeclosureRadar Inc., a Discovery Bay-based firm that says it tracks every foreclosure in the state.
In the West, foreclosure activity was unexpectedly mixed in December, it says. Between recent documentation issues and the December holidays, an across the board slow down in foreclosure activity seemed likely and foreclosure starts were down in Arizona, California, and Washington. But they were flat in Nevada and higher in Oregon.
“While we expect foreclosure activity to bounce around as mortgage servicers deal with the fallout from recent documentation issues, we found this month's mix of activity particularly strange as most large servicers and foreclosure trustees operate across all of the states we cover,” says Sean O’Toole, president of ForeclosureRadar.
“One possible explanation for this mix of activity is that servicers and trustees are dealing with issues specific to each stage of the foreclosure process on a state-by-state basis,” he says. “This would align with the recent Massachusetts Supreme Court decision that made it clear that lenders must follow the letter of the law in each state rather than simply continue industry practices. This could certainly slow one type of activity while accelerating another.”
Notice of Default filings – the first step in the foreclosure process -- fell 16.7 percent month-over-month in California, while Notice of Trustee filings rose 1.5 percent from November. Foreclosure sales dropped slightly, with 0.7 percent fewer sales back to the bank and 8.2 perfect fewer purchased by third parties, typically investors. The time it took investors to resell properties they purchased at auction rose 6.1 percent from November and is up 51.0 percent from a year earlier to 157 days on average.
Here are the ForeclosureRadar figures for the number of Notices of Default filed in December 2010 compared to a year earlier [in brackets] and the percentage difference:
• Butte – 67; ; -53.79 percent
• Fresno – 209; ; -30.56 percent
• Kern – 687; ; -20.21 percent
• Kings – 80; ; -19.19 percent
• Madera – 129; ; -5.84 percent
• Merced -- 228; ; -20.56 percent
• Sacramento – 1,322; [1,436]; -7.94 percent
• San Joaquin – 700; ; -12.28 percent
• Stanislaus – 473; ; -14.93 percent
• Tulare – 272; ; -22.06 percent
• Yolo – 79; ; -28.83 percent
• Yuba – 64; ; -23.81 percent
"Servicers appear to have their hands full and it may be a while before foreclosure activity stabilizes," says Mr. O'Toole. "While it seems unlikely at the moment, it is our hope that 2011 will bring clarity to the foreclosures process for all involved."