California foreclosure filings at all-time high

DISCOVERY BAY
April 15, 2008 1:52pm

California’s foreclosure crisis is accelerating and any normalization of the state’s real estate market is still far from complete, says a report Tuesday from ForeclosureRadar, a Discovery Bay-based foreclosure information company.

Notices of Default – the first step in California’s foreclosure process – jumped 14.3 percent during March, reaching a record high of 42,704, the report says.

These new entries into the foreclosure pipeline will produce a jump in foreclosure sales and bank owned (REO) properties for months to come, it says.

Notices of Trustee Sale, which are issued approximately 3 months following a Notice of Default, jumped 47.9 percent in March setting a record high of 27,571 filings.

Foreclosure sales at auction declined 6.5 percent in March to 15,833 with a combined loan value of $6.87 Billion. Lender inventories continue to swell as they failed to sell 97.7 percent of these properties despite offering an average discount of 21 percent off of loan value, the report says.

"Unfortunately, the foreclosure crisis in California is still deepening" says Sean O'Toole, founder of ForeclosureRadar. "The record jump in defaults last December are just now showing up in early April foreclosure sales, and the new record level of defaults this month won’t begin to appear at auction until July.”

Mr. O’Toole says he expects the housing pain to continue through the end of the year, as the market shakes off the effects of the credit mess and rampant overbuilding. “As devastating as this may be, we do think that the end result – greater housing affordability for the average Californian, using conventional loan products – will benefit consumers and the housing industry alike,” he says.

The largest discounts offered at auction were available in Merced County (32 percent off loan value on average), San Joaquin County (31 percent), and Monterey County (29 percent). Lenders offering the deepest discounts included Wilshire Credit Corp. (43.1 percent on average), World Savings (32.8 percent) and Downey Savings and Loan (30.4 percent).

Properties are sold on average of 145 days after the Notice of Default is recorded, up 13 days from March 2007. Total time to foreclosure can vary by lender, for example, World Savings takes an average of 158 days from Notice of Default to sale at auction, while Indymac completes the foreclosure process in just 121 days on average.

The Central Valley leads the state when it comes to foreclosed homes going to auction on a per capita basis. Merced County had 335 sales in March or one for every 737 people in the county, according to ForeclosureRadar, the highest rate in the state.

San Joaquin County is ranked second with 880 sales in March or one for every 757 residents.

Stanislaus County is third, with 653 sales, one for every 788 people.

Sacramento County is fourth, 1,381 sales or one per 1,003 residents.

Other Central Valley counties, with the number of sales followed by the population per sale:

• (11th) Madera County, 111 sales; 1,301 population per sale

• (12th) Kern County, 583 sales; 1,338 population per sale

• (20th) Yolo County, 90 sales; 2,115 population per sale

• (23rd) Tulare County, 190 sales; 2,214 population per sale

• (25th) Fresno County, 379 sales; 2,373 population per sale

• (38th) Kings County, 37 sales; 3,993 population per sale

• (44th) Butte County, 41 sales; 5,298 population per sale