Foreclosure flood: 1,000 auctions per day in California
California’s foreclosure crisis passed another ominous milestone in April, when more than 1,000 foreclosed homes were auctioned off every weekday at courthouses across the state, the auction tracking firm ForeclosureRadar reported today.
The April total of foreclosure sales at auction -- 22,838 for the state -- represents a jump of 44% over March totals and the highest level ever in California, ForeclosureRadar reports.
A separate estimate of foreclosures by DataQuick Information Systems had counted 47,171 foreclosures in the first quarter, a rate of more than 500 per day from January to March. The new statistics show every category of foreclosure statistics rose in April.
It appears the pipeline of potential foreclosures is jampacked, too: the ForeclosureRadar reported 44,101 new ‘Notices of Default’ filings in April, a new record for California. Notices of Default are the first step in the foreclosure process.
‘We expected a significant increase in auction sales based on previous default patterns,’ said Sean O’Toole, founder of ForeclosureRadar. ‘Unfortunately, the continued increases in defaults tell us that the worst is still ahead.’
As lenders grow more desperate to avoid taking possession of foreclosed homes, they are offering bigger discounts at courthouse auctions, with ‘discounts of 40% to 50% from prior sales price common in many parts of the state,’ ForeclosureRadar reports. Still, the auctions are usually uneventful, and usually do not attract serious bids. ‘The majority of these sales received no third-party bid and reverted back to the lender despite the largest across-the-board discounts ever offered at trustee sales auctions,’ ForeclosureRadar reported.
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