Foreclosures "HAMPered" by Making Home Affordable Program
Discovery Bay, CA, September 15, 2009 - ForeclosureRadar, the only website that tracks every California foreclosure with daily auction updates; today issued its California Foreclosure Report for August 2009. Foreclosure filings dropped both month-over-month and year-over-year, while the inventory of properties scheduled for foreclosure sale continued to grow, and foreclosure sales were flat.
High-level findings for August 2009 include:
- Notices of Default filings, the first step in the foreclosure process, dropped substantially from July to 36,396 filings, a 19.1 percent decrease. Year-over-year filings dropped by 14.2 percent from August 2008.
- Notice of Trustee Sale filings continued to swing wildly, dropping 15.1 percent from July to 33,362, after having jumped 31.6 percent from June to July. Year-over-year filings dropped by 8.1 percent from August 2008.
- Foreclosures scheduled for trustee sale increased to 131,300, a 5.1 percent increase from July, and an 89.1 percent year-over-year increase from August 2008.
- Foreclosures sold at auction increased 3.4 percent to 17,829 sales, with a combined loan value of $8.31 Billion. Year-over-year trustee sales remain 32.2 percent lower than August 2008. Just 13.4 percent of scheduled foreclosure sales were sold at auction this month, while 37.9 percent of scheduled foreclosure sales were sold in August 2008. The majority of sales are being postponed to a future date at either the lenders request or with their agreement.
- Sales to third party bidders rose 22.3 percent from July, with 3,280 foreclosures sold primarily to investors. As a percentage of total sales, sales to third parties continued to increase; though lenders still took back 81.4 percent of foreclosures at auction, representing 14,327 loans, a decline of 1.6 percent from July.
- Opening bids placed by lenders at trustee sale were an average of 39.5 percent lower than the loan balance, and 10.2 percent higher than estimated market value. Opening bids that did not result in a sale to a 3rd party were on average 19.9 percent higher than estimated market value, whereas those purchased by third parties were on average 29.7 percent below market value.
- Cancellation of foreclosure sales dropped by 7.5 percent from July to 9,976, with no signs yet that foreclosures being postponed for the new “Home Affordable Modification Program" are being cancelled after successful trial periods.
“It is clear at this point, that foreclosures are being HAMPered" says Sean O'Toole, founder and CEO of ForeclosureRadar. “Where foreclosures head from here will depend a lot on the administration's Home Affordable Modification Program, commonly referred to as HAMP. We can clearly see that this program is postponing an awful lot of foreclosures, but don't expect a wave of foreclosures if it fails, instead expect further government intervention."The Home Affordable Modification Program (HAMP) is a critical piece of President Obama's Financial Stability Plan first unveiled February 9th, 2009, with details released on March 4, 2009. One of three parts of the Making Home Affordable program, HAMP was designed to reduce mortgage payments for up to 3 to 4 million homeowners. Payments are reduced by first lowering interest payments to as low as 2%; then if necessary, extending amortization periods to 40 years, and finally forbearing principal, interest free, until the payment reaches a 31% debt to income ratio for a borrower. The program also provides incentives to mortgage loan servicers for participating, and requires participation by servicers of loans owned or guaranteed by Fannie Mae and Freddie Mac. Through August 2009, 360,165 trial modifications had been started. For more information, see makinghomeaffordable.gov.A key feature of the HAMP program is a 3-month trial period, during which foreclosures are postponed to see whether or not the homeowner makes the new, reduced payment as agreed. As a result, the number of scheduled foreclosures that are being postponed at the lenders request or with their agreement has doubled since details of the program were announced. At the end of August 2009 there were 131,300 foreclosures scheduled for sale, compared to 64,177 at the end of February 2009. If the HAMP trials succeed, foreclosures should begin to cancel at record rates, which has yet to happen. If HAMP trials fail, foreclosure sales should increase, which also has yet to happen.
ForeclosureRadar Report by County
RankChange In RankCountyNDFNTSSalesPopulation Per Sale% Change July 2009% Change August 200812Yuba1091038782718%4%225CalaverasNDND5092335%0%33San Joaquin1155114770797014%-45%48Lake99806598633%55%5-3Riverside396039532100994-9%-38%6-2Stanislaus81582651910134%-43%7-2Plumas1382010465%400%8-7Merced4324232381072-15%-57%91Madera175171139108613%-15%10-3San Bernardino31942947174111813%-31%11-3Solano63059435711952%-38%121Kern10871052683119716%-22%13-2Sacramento19541835111312803%-38%141Mono10101376-23%25%1522Tuolumne635139145695%144%160Contra Costa1335131270214982%-41%171Placer510433218152918%-10%18-1Imperial12813811515321%-19%19-5El Dorado3072191161549-3%15%20-1San Benito423037156216%-48%2114Amador434523165064%-8%22-1Sutter9311653180915%-44%230Fresno844774480194011%-23%2419Colusa2117111992-15%-27%2511Yolo16314598203138%-16%268Nevada1259348206630%4%276Sonoma433374230210621%-29%28-8Monterey3623921962186-8%-62%292Tulare40932419222679%-18%300Napa1261036022787%-18%31-7Tehama3729262401-13%-47%320San Diego28552623130524113%-29%33-5Shasta172151742463-3%3%34-5Glenn2017112654-15%38%353Alameda1225115056827177%-38%364Ventura700636277300210%-35%374Los Angeles74807042304634021%-25%38-16San Luis Obispo266136793409-39%-16%39-14Kings13089453432-37%-10%407Mendocino625425360739%127%4110Del Norte738367760%300%42-3Butte8962583800-23%-31%431Orange220219827714048-1%-38%441Santa Clara1256100743941856%-49%45-3Santa Barbara245237974347-16%-52%4611Inyo1044538ND33%479Trinity5634655200%-63%486Modoc5024851100%100%49-23Siskiyou232295108-55%50%503Lassen30197510875%-22%51-2San Mateo38834313853581%-18%52-4Santa Cruz13089465794-13%-64%53-3Marin15884337800-28%-28%54-2Humboldt41281683010%-6%55-9Mariposa1029203-50%-50%56-1San Francisco2411526612493-19%-8%
CALIFORNIA FORECLOSURE REPORT METHODOLOGYRankings 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.