lenders, PropertyRadar

$10 Billion In Loans Go "Back To The Bene"

Investor activity increases at the courthouse steps

Discovery Bay, CA, June 11, 2008 – ForeclosureRadar, the only website that tracks every California foreclosure with daily auction updates; today issued its California Foreclosure Report. Lenders, technically called the beneficiary or “bene” by foreclosure auctioneers, took back $10.4 Billion in California loans as a result of foreclosure sales in May. Despite this record we saw a significant increase in investor purchases at auction.

High-level findings include:

  • Notices of Default, the first step in California’s foreclosure process, were down 2.5% for the month totaling 43,011 new filings. Daily average filings were actually up 2.4% to 2,009 filings per day.
  • Notices of Trustee Sale can be issued 3 months following a Notice of Default and set the date, time and location of the foreclosure auction, increased 15.6 percent in May to a record 34,564 new filings.
  • Sales at auction increased 11.8% to a total of 25,523 properties. Of those 24,831 received no bid higher than the lenders opening bid and became lender owned (REO). The combined loan value at the time of foreclosure on this new REO inventory exceeded $10 Billion for the first time.
  • Despite more than 97% of foreclosed properties being returned to the lender, there was a notable 34.6% increase in properties purchased by third parties. We believe this third party bidding is due to a renewed investor interest as the lenders continue to increase discounts at auction.

“The increase in investor purchases at foreclosure auction is a welcome change.” said Sean O’Toole, founder of ForeclosureRadar. “For too long lenders were unrealistic about opening bids at auction. They finally seem to realize the magnitude of the problem and are beginning to discount accordingly.”

Lenders discounted 86 percent of all foreclosures taken to sale with an average discount of 28 percent. The Northern California Counties of Sacramento, San Joaquin, Stanislaus and Merced saw the largest average opening bid discounts ranging from 31 to 37 percent. In Southern California, Riverside saw the largest discounts, with an average of 27.5 percent, followed by San Bernardino at 25 percent.

At the county level we saw noticeable increases in foreclosure sales in both Riverside, which saw the highest level of foreclosures per capita in May, and San Bernardino which saw foreclosure sales increase by 22%. By total loan value, Southern California counties filled out the top five with Los Angeles having $1.83 Billion in loans foreclosed, Riverside $1.43B, San Bernardino $900M, San Diego $883M, and Orange at $695M. This is primarily due to the size of these counties – for example Los Angeles always has the highest foreclosure counts, yet ranks 33rd in our report when normalized for population.

 ForeclosureRadar May Report by County

Rank Change In Rank County NDF NTS Sales Population
Per Sale
% Change
April 2008
% Change
May 2007
1 2 Riverside 5385 4447 3564 548 9% 269%
2 -1 Merced 564 509 431 573 -2% 307%
3 -1 San Joaquin 1498 1426 1102 605 -5% 232%
4 1 Stanislaus 1271 1080 817 630 4% 304%
5 4 San Bernardino 4106 3359 2648 752 22% 322%
6 7 San Benito 49 54 76 758 41% 375%
7 -1 Sacramento 2620 2237 1730 801 5% 169%
8 0 Yuba 143 90 86 812 6% 146%
9 6 Madera 206 148 170 849 34% 448%
10 -3 Solano 826 612 481 879 -2% 285%
11 3 Contra Costa 1723 1356 1141 902 20% 310%
12 -1 Kern 1266 1037 795 981 2% 235%
13 5 Sutter 141 99 76 1,203 21% 204%
14 5 Placer 432 370 248 1,276 18% 188%
15 2 Monterey 613 449 307 1,384 2% 339%
16 12 Sonoma 488 428 328 1,463 39% 438%
17 6 San Diego 3362 2801 1977 1,551 17% 191%
18 7 Fresno 957 738 561 1,603 21% 257%
19 -9 Lake ND ND 40 1,603 -39% 186%
20 -8 Calaveras ND ND 26 1,758 -40% 2500%
21 1 Tehama ND ND 33 1,865 -6% 106%
22 4 Ventura 784 635 437 1,870 5% 267%
23 6 Amador 28 29 20 1,907 11% 82%
24 3 El Dorado 185 141 91 1,936 3% 107%
25 -4 Yolo 200 136 97 1,962 -9% 116%
26 6 Alameda 1457 1080 754 1,991 15% 259%
27 -7 Imperial 229 193 83 2,007 -22% 137%
28 7 Napa 116 85 65 2,068 41% 282%
29 -13 Colusa ND ND 10 2,151 -44% 900%
30 -6 Tulare 415 275 193 2,179 -14% 245%
31 -1 Santa Barbara 311 256 188 2,243 9% 300%
32 1 Orange 2528 2046 1332 2,307 18% 302%
33 1 Los Angeles 8209 6416 4274 2,397 15% 283%
34 6 Santa Clara 1291 920 674 2,631 35% 536%
35 3 Shasta 107 101 65 2,792 14% 81%
36 6 Butte 95 54 75 2,896 29% 108%
37 2 Santa Cruz 183 127 85 3,086 5% 673%
38 5 Kings 93 53 46 3,212 18% 360%
39 -3 Nevada 85 58 30 3,336 -9% 100%
40 -3 San Luis Obispo 190 118 74 3,557 -14% 196%
41 4 Tuolumne 45 22 16 3,639 23% 433%
42 9 Mendocino 36 28 18 5,025 29% 260%
43 6 Marin 98 80 50 5,067 6% 400%
44 -13 Mariposa ND ND 3 6,072 -57% ND
45 5 San Mateo 417 318 119 6,085 1% 240%
46 -2 Siskiyou 18 18 7 6,592 -36% 75%
47 5 Trinity ND ND 2 7,012 -33% 100%
48 7 Del Norte ND ND 3 9,732 50% 200%
49 -2 Modoc ND ND 1 9,836 -50% ND
50 -9 Plumas 12 4 2 10,722 -67% 100%
51 -5 Mono 2 2 1 13,597 -86% -50%
52 2 San Francisco 171 110 54 14,790 -14% 200%
53 0 Humboldt 39 20 8 16,566 -27% 33%
54 -6 Lassen ND ND 2 17,726 -75% -50%

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 CALIFORNIA FORECLOSURE REPORT METHODOLOGY

Rankings are based on population per foreclosure sale. NDF indicates the number of Notices of Default that were filed at the county, and NTS indicates filed Notices of Trustee Sale. Sales indicates the number of properties sold at foreclosure auction. Percentage changes are based on monthly Sales. The data presented by ForeclosureRadar is based on county records and individual sales results from daily foreclosure auctions throughout the state—not estimates or projections.

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