Banks Moving Slowly on Foreclosures

Banks Moving Slowly on Foreclosures


Despite being exempt from California’s foreclosure moratorium, many lenders in June chose not to schedule foreclosure auctions for delinquent borrowers, data from ForeclosureRadar show.

Notice of trustee sale filings -- in which lenders set an auction date for property on which a mortgage is in default -- were down 14.8% in June from the same month the previous year, ForeclosureRadar reported. ForeclosureRadar is a website that sells default data for California.

This drop in foreclosure notices is happening as the number of borrowers defaulting is rising. ForeclosureRadar says June’s 45,691 default filings were up 10% over the same month the previous year. So, absent a moratorium of some sort, foreclosure notices should follow default notices proportionately.

That hasn’t happened. ForeclosureRadar Chief Executive Sean O’Toole said, ‘A number of lenders appear to have self-imposed California's latest foreclosure moratorium on themselves, despite having received an exemption from it. The California moratorium, which mandates lenders postpone foreclosure auction notices by 90 days, exempts banks that have a loan modification program in place -- and most major banks were thus exempt because they have such programs.

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