ForeclosureRadar.com reports banks foreclosed on 376 houses and condos in Orange County in March, down 40% from a year ago and 50% from February. That’s the lowest total since 312 in June 2007.
However, the decline may be short-lived. As the chart shows (click on it for larger image) notices of default, which initiate the foreclosure process, totaled 2,591 in March, up 58% from February and the highest monthly total in this downturn.
The chart shows how a state law enacted in September led to big decreases, first in notices of default and then in foreclosures. NODs have more than reclaimed past gains, so actual foreclosures may follow. The law, which is only for loans made at the tail end of the housing boom, requires lenders to talk to borrowers at least 30 days before filing an NOD and discuss options to avoid foreclosure.
In any case, the drop in actual foreclosures was similar statewide with properties sold at foreclosure auctions (trustee’s sales) down 41.4 percent from February, for a total of 10,040 properties sold at auction, representing $5.3 billion in loan value. Year-over-year auction sales decreased by 36.6 percent.
ForeclosureRadar said, in addition to the state law discussed, foreclosures are down and NODs are up because:
- “The California Foreclosure Prevention Act, which goes into effect this summer, adds an additional 90 days to the foreclosure process if lenders fail to take certain actions. It is quite possible that the dramatic rise in foreclosure notices occurring now is an attempt by lenders to process as many foreclosures as possible before this law takes effect.
- “U.S. Congressional requests for foreclosure moratoriums — many lenders instituted foreclosure moratoriums at the request of Congress — to allow the incoming Administration time to put housing programs in place. Many of these moratoriums were in full force through March, although some are now being lifted – notably Fannie Mae and Freddie Mac – which both lifted their moratoriums effective March 31.
- “U.S. efforts to stabilize financial institutions, including TARP, PPIP and changes to “mark-to-market” accounting practices, among others, may be leading some lenders to avoid completing foreclosures in the hopes of selling the troubled loans, to gain government guarantees for those loans or to continue avoiding losses by holding the assets on their books at higher values than they could get in today’s real estate market.”
In other news…
- Huntington Beach man named in crackdown on predatory lending
- Mortgage insurer fails to get bailout money
- Behind the profits at Wells Fargo
- Missouri AG sues O.C. loan-aid company
- Bailed-out banks face scrutiny over fee hikes
- The Fed and mortgage rates
- Fed economists say foreclosure relief ineffectual
- Loan doors open for serial housing investors
- Is Wells Fargo the smartest of the big banks?
- Wells Fargo projects record $3 billion profit
- Economy to get limited boost from lower mortgage rates
- The Fed’s thinking on rates
- Feds plan mortgage fraud task force
- Homeowners redefaulting faster after a loan modification
- O.C. bank has bigger than expected losses
NOD’s lead to foreclosure eventually.
I expect this to be short-lived, as we will likely witness another wave of foreclosures, this time affecting more affluent Alt-A stated income (and even high FICO score, full doc) borrowers who got Option ARM mortgages or short-term ARMs on investment properties. I’ve talked to a lot of homeowners with great credit who felt like they had to get in on the real estate boom, so they bought one, two or more investment properties.
In order to make them cash flow they got short term ARM loans expecting the properties to surge in value and then they could just refi. Now they’re in a situation where their mortgages will be resetting late this year or next, and they’re going from breaking even to negative cash flow of $1000+.
What incentive is it for them to hold on to the property when many of the banks won’t even negotiate a loan mod until the borrower becomes delinquent?
Whoa Nelly! Look at all those NOD’s!
this is a 2 year low number
Probably has something to do with the fact that more people are filing for bankruptcy as a new ploy to delay foreclosure. People can be pretty crafty when skirting the system, but that headline of “People are crafty when skirting the system” isn’t as fun.
2 cents…
Wells Fargo, Fannie/Freddie, JPM, and others have just lifted their foreclosure moratoriums according to a report out by CNBC (Diana Olick foreclosure radar). Watch for the banks to dump these soured assets. Flush it out!
The calm before the storm. Until the job market improves, I wouldn’t expect any plateau in foreclosures.
What a misleading headline.
The NOD’s indicate that we are headed for a new peak in foreclosures this year!
This is ONLY because of the govt. imposed “moratorium” on foreclosures.
Which, by the way, only delayed what is coming and multiplied it by a factor of no less than 3!
Save till nov. 2010, then by the place you’ve always wanted. Unless you bought at the peak, your screwed, happy BK
That’s a lot of NOD’s. Kind of a misleading headline!
OWNED_BY– the register is notorious for spinning the
news regarding orange county real estate- afterall they
helped cheerlead the bubble all the way up with front
page headlines of record breaking prices and articles
about gary watts and his crystal ball- then they try to
playdown the aftermath of the greatest bubble in the history
of mankind- then youve got the national media doing the
same thing instead of what they should be doing- exposing
the fraud and demanding the truth of bank balance sheets-
-
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aNMQDysdnKRc
Realtytrac and foreclosureradar report tomorrow, rumor is 50K in NOD’s for the state. Crazy!
The worst has yet to come to OC and California. More jobloss and foreclosures ahead. Lenders and Banks are force to clean up its toxic assests. Good in a long run but the pains are still the same.
If anyone thinks that current data on NOD’s or Foreclosures is accurate they are not understanding the lenders current thought process. there are so many homeowners in OC that are well over 90 days down on payments and no record of this can be found anywhere. This is not a good thing for people currently purchasing homes. Obviously, a home in distress that is not being disclosed to a current buyer is not good.