California Foreclosures Set for Liftoff?

Lookout, below. California could get hit by a new wave of foreclosure sales.

Notices of default, which mark the first step in the foreclosure process, fell by 1.5% in July from June but increased by 12% from one year ago, according to ForeclosureRadar, which tracks California foreclosure sales.

Meanwhile, filings for notice of trustee sales, which show the number of properties scheduled for a foreclosure sale, increased by nearly 32% in July from June. New trustee sale notices, excluding those sales that have been canceled or already taken place, rose to a record level of nearly 125,000 in July, up 10% from one month ago and nearly double the levels during the 2008 foreclosure peak.

The increases in pre-foreclosure notices came after foreclosure auction sales fell by 23% in June, ending three straight months of increases. California had 17,000 foreclosure sales in July, a 40% drop from the July 2008 high. Nearly 45% of sales resulted in prices that were at least half of the original loan balance.

Meanwhile, housing inventory listed for sale in California and several other markets continues to shrink as the summer selling season winds up.

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