Foreclosure Cancellations Jump 40 Percent

Written by:
Written on:
December 16, 2009
Category:
Not Categorized

November Foreclosure Sales and Filings Impacted by Holidays

Discovery Bay, CA, December 15, 2009 - 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 November 2009. Despite apparent headline month-over-month declines in foreclosure activity, the real story requires looking at changes in the average daily activity. November had only 18 days on which filings could be recorded or trustee sales held because of fewer days in the month, Veterans Day and the Thanksgiving Holiday, while October had 22 recording days, and 21 trustee sale days. After adjusting for this difference in days we find little month-over-month change in the statistics, with the exception of Notices of Trustee Sale which declined 13.4 percent, Cancellations which rose 40.0 percent and Sales to 3rd Parties which rose 8.0 percent on a daily average basis."We've been waiting to see some impact from the Home Affordable Modification Program," says Sean O'Toole, Founder and CEO of ForeclosureRadar.com. "The 40 percent increase in cancellations this month is likely just the beginning of what we expect will be a wave of cancellations under this program".

Foreclosure Filings

Notice of Default

Prior MonthPrior Year-18.98%35.41%

Notice of Trustee Sale

Prior MonthPrior Year29.14%-4.03%

It is important to recognize that the decline in Foreclosure Filings is primarily due to a difference in the number of days documents can be recorded month-over-month and not fewer filings each day. With just 18 recording days in November versus 22 in October, average daily filings of Notices of Default only declined 1 percent, while Notices of Trustee Sale declined 13.4 percent from the prior month.

8-Jun8-Jul8-Aug8-Sep8-Oct8-Nov8-Dec9-Jan9-Feb9-Mar9-Apr9-May9-Jun9-Jul9-Aug9-Sep9-Oct9-Nov435804186143504167461736121857439744058049799586234733742203470934753037063381753653129597362124012637329196742640228468284492489021147345593155643355307114075734224331123855527321

Foreclosure Outcomes

Back to Bank (REO)

Prior MonthPrior Year12.20%-7.52%

Cancellations

Prior MonthPrior Year19.77%26.10%

Sold to 3rd Party

Prior MonthPrior Year-7.43%286.13%

Like Filings, Foreclosure Outcomes have to be looked at on a daily average basis to understand the month- over-month differences. When that is done, we see that Bank Owned properties increased 2.4 percent, and Sold to 3rd Party increased 8.0 percent on a daily average basis from the prior month.

Perhaps most significant is the 40.0 percent month-over-month increase in daily average Cancellations when viewed on a daily average basis. This is especially notable as the Obama Administration announced a new campaign this month to convert trial loan modifications to permanent modifications. This is important because properties remain in foreclosure during the trial period, and are only cancelled once the modification becomes permanent. We've therefore been watching sales and cancellation closely looking for either a rise in foreclosure sales as modifications fail, or a rise in cancellations if they become permanent. This months rise in cancellations are in line with recent Administration reports that 31,382 of the 728.408 trial modifications became permanent. And given their new conversion drive, further cancellations are likely.

8-Jun8-Jul8-Aug8-Sep8-Oct8-Nov8-Dec9-Jan9-Feb9-Mar9-Apr9-May9-Jun9-Jul9-Aug9-Sep9-Oct9-Nov237882800125381221121329615267156081453316419920112145158641971314632143671315516081141194741579756946368112818302644567176904635267077162867410818100048660874110469773988106910768259528338931266109416532305269426913285341139713676

Foreclosure Inventories

Scheduled for Sale

Prior MonthPrior Year1.42%135.96%

Bank Owned (REO)

Prior MonthPrior Year0.04%-39.42%

Despite the significant drop in filings of new Notices of Trustee Sale, and an increase in the number of Cancellations, the number of foreclosures Scheduled for Sale still rose. The simple reality is that homeowners are continuing to enter foreclosure faster than they are coming out. This will likely continue until we see meaningful progress on loan modifications, or the often predicted "foreclosure wave" finally occurs.

Resale of Bank Owned (REO) homes declined in November, but so too did the number of homes that banks took back at auction, leaving inventories flat month-over-month.

8-Jun8-Jul8-Aug8-Sep8-Oct8-Nov8-Dec9-Jan9-Feb9-Mar9-Apr9-May9-Jun9-Jul9-Aug9-Sep9-Oct9-Nov59518645986942859226596956423767841693746417782390920021118241131411248741313001403821494561515731335321445961526141552691470761452261390281350731331431204271101771045281019329553093584898348793887976

Foreclosure Discounting

The discounts received by 3rd party investors at the court house steps increased to 19.9 percent below market value, from the prior months 17.9 percent below.

Foreclosure Sales by Loan Origination Date

Q1'04Q2'04Q3'04Q4'04Q1'05Q2'05Q3'05Q4'05Q1'06Q2'06Q3'06Q4'06Q1'07Q2'07Q3'07Q4'07Q1'08Q2'08Q3'08Q4'08142218297468603938133914591349170118142020163413178674942711338849Despite 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

Written by:
Written on:
December 16, 2009
Category:
Not Categorized