Foreclosure Sales Continue to Plummet
For the second month in a row, we’ve seen a dramatic drop in the number of properties sold at foreclosure, or “trustee sale”, auctions. Foreclosure sales in California are down 16.7 percent from February to March 2012 and down 53.1 percent from March a year ago. A total of 86,487 sales were scheduled to occur in California, but of those 80.0 percent postponed, and 10.6 percent were cancelled, leaving just 8,392 that were actually sold. Third parties, typically investors, purchased a record 38.6% of the properties that did sell in California.
Foreclosure starts rose in most states, with the largest increases occurring in Washington, California and Nevada. This, at least temporarily, reverses a downward trend, but even with the increase the volume of new foreclosures remains significantly down year-over-year in all the states we cover.
The increase in foreclosure starts is especially interesting in Nevada. Bank foreclosures came to an almost complete halt there after the passage of Assembly Bill 284, which made significant changes to Nevada’s foreclosure laws. The increase this month is directly attributable to new foreclosure starts by Fannie Mae, which is one of very few lenders to have filed any new foreclosures in Nevada since September 2011. Even with the increase by Fannie Mae it is still homeowner associations that are initiating the vast majority of foreclosures in Nevada.
“It is easy to see why some analysts continue to predict that there will be a wave of foreclosures. Clearly we still have far too many homeowners in trouble, and with the recent Attorney General Settlement over robo-signing, and other issues, it seems completely logical that a wave of foreclosures would follow. It won’t.”, stated Sean O’Toole, Founder & CEO of ForeclosureRadar. “To reach the conclusion that there will be a wave of foreclosures, you have to assume that the banks either want to foreclose – they don’t – or will be forced to foreclose – they won’t. In September 2008 the rules of the game were changed to help the banks remain solvent, and since then it has been in their best interest to find reasons to delay foreclosures through whatever means necessary. I don’t see that changing anytime soon.”