Dramatic Increase in California
Foreclosure Cancellations
October 2012 California foreclosure Cancellations were up 62.1 percent from the prior month, and 36.7 percent compared to last year. While this is not the first time Cancellations have spiked, this is the largest one-month increase since we started tracking foreclosures in September 2006. It seems likely that the increase is being driven by the Homeowner Bill of Rights legislation that goes into effect on January 1, 2013 and its provision to restrict the dual-tracking of foreclosures. Dual-tracking is the term applied to loans which are being considered for either a short sale or loan modification while simultaneously proceeding through the foreclosure process. Prior to January 1, lenders will have to cancel any foreclosure on a loan for which a short sale has been approved or a loan modification is being considered, and it appears that process has likely already begun.
October 2012 California Notice of Defaults was down 8.0 percent from the prior month, and down 48.9 percent compared to last year. October 2012 California Foreclosure Sales were up 9.3 percent from the prior month, but down 38.9 percent from the prior year.
“The California Homeowner Bill of Rights that takes effect in January 2013 is beginning to impact foreclosure trends,” said Sean O’Toole, Founder & CEO of ForeclosureRadar. “This is another example of where changes in foreclosure trends are driven by government intervention, and not necessarily economic recovery. While the impacts are still unclear, the elimination of dual tracking may avoid some unnecessary foreclosures, but will lengthen the foreclosure process and delay ultimate recovery. Expect further impacts to foreclosure trends in the months ahead.”
Foreclosure Statistics – October 2012:
Arizona (Notice of Trustee Sale filings):
Foreclosure Starts: 3,679 (-15.0%)
Foreclosure Sales: 3,125 (-0.1%)
Time to Foreclose: 137 days (+2.2%)
California (Notice of Default filings):
Foreclosure Starts: 13,585 (-8.0%)
Foreclosure Sales: 8,781 (+9.3%)
Time to Foreclose: 282 days (+0.4%)
Nevada (Notice of Default filings):
Foreclosure Starts: 1,985 (+32.2%)
Foreclosure Sales: 744 (+33.8%)
Time to Foreclose: 433 days (-2.5%)
Oregon (Notice of Default filings):
Foreclosure Starts: 84 (+58.5%)
Foreclosure Sales: 176 (-55.3%)
Time to Foreclose: 140 days (-1.4%)
Washington (Notice of Trustee Sale filings):
Foreclosure Starts: 2,652 (-4.1%)
Foreclosure Sales: 751 (+8.8%)
Time to Foreclose: 121 days (+12.0%)
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Some clarification is needed regarding the Home Owner Bill of Rights and Dual tracking. It is NOT correct that the HOBR will stop dual tracking on a short sale. According to CAR legal the bank will only stop dual tracking on a SHORT SALE (loan mod is indeed different) upon the full approval in writing of a short sale. So, though the article stated “consideration”, that is not correct. Dual tracking will in fact be in full effect on ALL short sales “during” the process and only after obtaining all approvals will it stop. So for all of you agents, the clock is still ticking, you will not get to relax. Please do not think you have time because in California that would be a big mistake ending in foreclosure while trying to get the short approved. Thought you all should know.
Doug- Thanks for the additional details and insight.
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Interesting spike in cancellation. How is cancellation tracked by Foreclosure radar? Call to trustee? Or by way of recorded recession?
Dan-
We track the cancellations by way of trustee calls.
-Susan
Great. More handouts for the deadbeats. CA “Homeowner” Bill of “Rights”?
How about “Loan App Liar, Live Rent Free or Skim rent for 3+ years, & still Get a Free Pony at the expense of new, hopeful, verified & qualified homebuyers Deadbeat” Bill of Rights?
Bullshit. Frustrating.
Saw the foreclosure wave coming back in 2004, but actually thought there would be… wait for it…. consequences…. for all the “stated income” liar bubble buyers (or cash-out house ATMers).
Ohhhhhhh… how quaint & naive of me.