Foreclosure Cancellations Continue to Climb

Short sales and loan modifications are not the only explanation

Discovery Bay, CA, May 11, 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 April 2010. Foreclosure filings were down in April for the first time since the beginning of the year. Despite the decline in filings, the inventory of properties in preforeclosure or scheduled for sale only dipped slightly as the drop in filings were offset by an increase in the time to foreclose. Cancellations continue to climb, up more than 32 percent from the beginning of the year. The number of properties sold to 3rd parties also continues to climb, helped again this month by slightly better discounts.

“The steady rise in cancellations leads us to believe that loan modifications and short sales are gaining traction” says Sean O’Toole, Founder and CEO of ForeclosureRadar.com. “I’d caution, however, that cancellations also occur due to filing errors and extended postponements, which require the Notice of Trustee Sale to be re-filed. In fact, 14.6 percent of new Notice of Trustee filings in April were on previously cancelled foreclosures.”

Foreclosure Filings

Notice of Default

Prior Month Prior Year
-16.01% -41.20%

Notice of Trustee Sale

Prior Month Prior Year
-10.25% -3.10%

Notice of Default filings are the first step in the foreclosure process. Notice of Trustee Sale filings set the date and time of auction and serve as the homeowner’s final notice before sale.

8-Nov 8-Dec 9-Jan 9-Feb 9-Mar 9-Apr 9-May 9-Jun 9-Jul 9-Aug 9-Sep 9-Oct 9-Nov 9-Dec 10-Jan 10-Feb 10-Mar 10-Apr
21857 43974 40580 49799 58623 47337 42203 47093 47530 37063 38175 36534 30478 27200 25904 31309 33139 27832
28468 28449 24890 21147 34559 31556 43355 30711 40757 34224 33112 38558 28170 28475 27220 28501 34071 30578

Foreclosure Outcomes

Back to Bank (REO)

Prior Month Prior Year
-5.52% 19.53%

Cancellations

Prior Month Prior Year
11.39% 174.37%

Sold to 3rd Party

Prior Month Prior Year
6.05% 158.62%

After the filing of a Notice of Trustee Sale, there are only three possible outcomes. First, the sale can be Cancelled for reasons that include a successful loan modification or short sale, a filing error, or a legal requirement to re-file the notice after extended postponements. Alternatively, if the property is taken to sale, the Bank will place the opening bid. If a 3rd party, typically an investor, bids more than the bank’s opening bid, the property will be Sold to 3rd Party; if not, it will go Back to Bank and become part of that bank’s REO inventory.

8-Nov 8-Dec 9-Jan 9-Feb 9-Mar 9-Apr 9-May 9-Jun 9-Jul 9-Aug 9-Sep 9-Oct 9-Nov 9-Dec 10-Jan 10-Feb 10-Mar 10-Apr
15267 15608 14533 16419 9201 12145 15864 19713 14632 14367 13155 16018 14165 12471 13943 11983 15365 14517
8302 6445 6717 6904 6352 6707 7162 8674 10818 10004 8660 8757 10487 13287 13859 13806 16520 18402
952 833 893 1266 1094 1653 2305 2694 2691 3285 3411 3960 3683 2629 3707 3631 4031 4275

Foreclosure Inventories

Preforeclosure

Prior Month Prior Year
-3.17% -17.69%

Scheduled for Sale

Prior Month Prior Year
-2.77% 49.72%

Bank Owned (REO)

Prior Month Prior Year
0.26% -19.95%

Preforeclosure inventory is an estimate of the number of properties that have had a Notice of Default filed against the property, but have not yet been Scheduled for Sale. The Scheduled for Sale inventory indicates those properties that have had a Notice of Trustee Sale filed, but have not yet been sold or had the sale cancelled. The Bank Owned (REO) inventory indicates the number of properties that have been sold Back to Bank at the trustee sale, and which the bank has not yet resold to another party.

8-Nov 8-Dec 9-Jan 9-Feb 9-Mar 9-Apr 9-May 9-Jun 9-Jul 9-Aug 9-Sep 9-Oct 9-Nov 9-Dec 10-Jan 10-Feb 10-Mar 10-Apr
96534 112078 130550 159215 179412 185603 174243 186060 175283 171841 169860 154905 157288 146941 152322 140126 157768 152770
64237 67841 69374 64177 82390 92002 111824 113141 124874 131300 140382 149456 151573 147570 145977 145260 141669 137741
147090 141176 137331 135488 122901 112792 107762 106139 100206 98829 95479 93926 93595 89119 90551 89529 90065 90295

Foreclosure Discounting

Foreclosure discounting compares the winning Bid Amount of properties sold at trustee sale to both the outstanding Loan Amount, and the current Market Value. Banks place an opening bid for each property, and if a 3rd Party does not make a higher bid the property will be sold Back to Bank (REO) for the opening bid amount. While 3rd Party bids are higher than the opening bid, properties Sold to 3rd Parties typically have lower opening bids to start with and therefore deeper discounts to both Loan Amount and Market Value.

Foreclosure Timeframes

<tr >Prior MonthPrior Year

Time to Foreclosure

6.22% 40.07%

Time to Resell – Bank

Prior Month Prior Year
6.47% 5.56%

Time to Resell – 3rd

Prior Month Prior Year
5.88% -17.35%

Time to Foreclose is the total time from the filing of the Notice of Default to the sale of the property at trustee sale, and reflects those properties sold in the month indicated. Time to Resell reflects how long it takes banks and 3rd parties to resell the properties they take back or purchase at trustee sale.

8-Nov 8-Dec 9-Jan 9-Feb 9-Mar 9-Apr 9-May 9-Jun 9-Jul 9-Aug 9-Sep 9-Oct 9-Nov 9-Dec 10-Jan 10-Feb 10-Mar 10-Apr
163 165 192 198 176 171 180 173 187 185 191 195 198 222 229 224 225 239
195 206 218 223 231 234 240 244 238 228 220 219 220 224 224 224 232 247
178 187 193 186 214 196 183 168 146 147 141 131 133 141 149 150 153 162

Foreclosure Activity By County

Notice of Default Notice of Trustee Sale Back to Bank (REO) Sold to 3rd Pary