DataQuick reports banks seized 591 houses and condos in May in Orange County, up 22.6% from April but down 47.7% from a year ago.

The chart (click on it for larger image), which I first published over the weekend, shows annual countywide foreclosure totals — I used year-to-date total for 2009 — and annual unemployment rates for O.C. — I used April’s rate for 2009.

It shows that the unemployment rate rose first and then foreclosures in the ’90s. But foreclosures fell in the early 2000s even as unemployment rose. Low interest rates and rising home prices reduced foreclosures. The chart suggests a lot more foreclosures are coming.

However, if one looks at monthly totals (see table below), foreclosures fell after a state law was enacted in September requiring lenders to talk to borrowers about methods to avoid foreclosure at least 30 days before filing a notice of default.

Some experts say the law only delayed foreclosures, and they also say a statewide 90-day foreclosure moratorium, which began Monday, lacks teeth. Loan servicers can apply for an exemption to the moratorium by showing they are already doing loan modifications.

State and federal data show banks are doing more loan modifications these days, which could explain why foreclosures remain below the peak level of 2008, when banks were seizing more than 1,000 homes per month in the county.

Yet federal data also show borrowers are re-defaulting more than half the time after getting a modification.

Default notices also fell amid the September law, but have since rebounded. Banks filed 2,590 such notices last month, down 12.1% from April but up 4.9% from a year ago. Banks typically file an NOD, which starts the foreclosure process, after a borrower misses three or more monthly payments.

To see pricing and sales data from last month, CLICK HERE.

And the following table shows defaults and foreclosures (Forec.) going back to 2007:

In other news…

• 48 O.C. ZIPs had May sales gains! Did yours?
• Treasury releases plan to overhaul financial markets
• The Fed would gain power under Obama plan
• Banks accept 66% of debt value at foreclosure auctions
• O.C. thrift failure blamed on regulator and executives, report says
• Have pre-foreclosure filings hit a plateau?
• Mortgage giants USA own $100-plus billion of junk
• California’s 90-day foreclosure moratorium starts, sort of
• Obama to unveil banking oversight changes. Your vote?
• Painful months ahead for housing?
• O.C. mortgage rates ease
• Answers for first-time home buyers
• Video interview of widow, 85, facing foreclosure

Posted in: Defaults & Foreclosures |

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