Despite apparent declines daily foreclosure activity is up on all fronts
Discovery Bay, CA, February 16, 2010 - ForeclosureRadar (www.foreclosureradar.com), the only website that tracks every California foreclosure and provides daily auction updates, issued its monthly California Foreclosure Report for for January 2010. With hundreds of thousands of California homeowners in foreclosure a stalemate continues as only a small percentage reach the end of the process through cancellation or sale and the time to foreclose increases. Once again the raw numbers fail to tell the story on foreclosure activity due to the difference in number of business days in January (19) vs. December (22). On a daily average basis foreclosure activity increased on all fronts.“With delinquent payments rising, foreclosures slowing, and foreclosure alternatives failing,” says Sean O’Toole, Founder and CEO of ForeclosureRadar.com, “it appears the foreclosure crisis will be with us for many years to come”.
Notice of Default
Prior MonthPrior Year-5.38%-36.58%
Notice of Trustee Sale
Prior MonthPrior Year-4.74%8.98%
After significant declines in December, Foreclosure Filings were slightly lower overall in January. With only 19 days that notices could be recorded in January, compared to 22 in December, foreclosure notice filings actually increased on a daily average basis with Notice of Default filings increasing by 9.5 percent from December, and Notice of Trustee Sale filings increasing by 10.3 percent.
Back to Bank (REO)
Prior MonthPrior Year11.72%-4.20%
Prior MonthPrior Year4.32%106.24%
Sold to 3rd Party
Prior MonthPrior Year40.55%312.991%
Like filings above, Foreclosure Outcomes also dramatically reversed course from the prior month. With significant increases in all outcomes, especially on a daily average basis, the number of foreclosures that went Back to Bank rose 29.4 percent, Sold to 3rd rose by 62.7 percent, and Cancellations by 20.8 percent. While these increases were significant, a smaller percentage of foreclosures Scheduled for Sale completed the process in January 2010 (21 percent), than a year earlier (31 percent).
Prior MonthPrior Year3.55%16.55%
Scheduled for Sale
Prior MonthPrior Year-1.08%110.42%
Bank Owned (REO)
Prior MonthPrior Year2.57%-33.44%
The total number of properties in the foreclosure process remain near record levels in California despite declines in new Notice of Default filings over the last year, largely due to the increase in the time it is taking banks to foreclose, which we cover in a new measure, Time to Foreclose, in this months report. Once Bank Owned (REO) properties are listed for sale they continue to sell quickly, leaving banks with lower than expected inventories.
*Note that we have altered our methodology for calculating Preforeclosure Inventories from introducing it last month.
While sales to 3rd Parties increased in January, the average discount on trustee sale purchases narrowed. The average discount 3rd Parties received from market value dropped from 18.6 percent in December to 17.5 percent in January. Banks are not discounting opening (or drop) bids at auction as aggressively as in the past and investors are reporting increased competition at the auctions, resulting in higher bid amounts.
Time to Foreclosure
Time to Resell - Bank
Prior MonthPrior Year0.00%2.75%
Time to Resell - 3rd Party
Prior MonthPrior Year5.67%-22.80%Despite prices now well below 2004 levels in many areas, loans made in 2004 and earlier remain a very small percentage of foreclosures.
Foreclosure Activity By County
Notice of DefaultNotice of Trustee SaleBack to Bank (REO)Sold to3rd Party