California Foreclosure Prevention Act has unexpected impact on June filings
Discovery Bay, CA, July 14, 2009 - ForeclosureRadar, the only website that tracks every California foreclosure with daily auction updates; today issued its California Foreclosure Report for June 2009. For the third consecutive month, foreclosure sales jumped significantly as lenders come off the moratorium. Foreclosure sales increased by 24.7 percent following a 31.9 percent increase in May, and a 35 percent April increase. Notices of Trustee Sale dropped by an unexpected 28.7 percent, with the timing of the drop indicating that it was in response to the California Foreclosure Prevention Act. This law was widely believed to have little or no impact on foreclosure filings, as it exempted the majority of large lenders that operate in the state.
High-level findings for June 2009 include:
- After a 4.2 percent drop the prior month, Notices of Default, the initial step in the foreclosure process, rose by 11.8 percent to the second highest level on record at 45,691 filings. Year-over-year filings increased by 10.0 percent from June of 2008.
- Notices of Trustee Sale, which set the auction date and time, dropped by a surprising 28.9 percent from May to 29,853 filings. Notice of Trustee Sale filings also dropped year-over-year by 14.8 percent.
- A total of 22,291 foreclosures were taken to sale at auction, representing loan value of $9.57 Billion dollars; a 24.7 percent increase from the prior month, though 8.2 percent lower than the prior year. The opening bids set by lenders were an average 39.3 percent lower than the loan balance, with 46.0 percent of sales discounted by 50.0 percent or more.
- Sales to third party bidders at auction in June increased by 18.3 percent from May, to 2,687 foreclosures. As a percentage of sales, the majority of foreclosures still continue to be taken back by the lender; 87.9 percent or 19,604 sales, with a total loan value of $8.44 Billion, were taken back by the lender in June.
- A new statistic we are watching closely is the number of properties actively scheduled for sale – meaning that a Notice of Trustee Sale has been filed to set the auction date and time, but the foreclosure has not yet been sold or cancelled. Under California's foreclosure code, a foreclosure sale can be postponed repeatedly for one year before a new Notice of Trustee Sale has to be filed. While postponements are quite common, they have reached record levels in recent months, swelling the number of scheduled foreclosures 90.1 percent year-over-year to 113,141.
"A number of lenders appear to have self-imposed California's latest foreclosure moratorium on themselves, despite having received an exemption from it," says Sean O'Toole, founder and CEO of ForeclosureRadar. "Given the number of exempt lenders it was quite surprising to see Notice of Trustee Sale filings drop by nearly 50 percent the day the new law went into effect."The California Foreclosure Prevention Act adds an additional 90 days to the time before which a lender can file a Notice of Trustee Sale. Lenders can avoid this additional requirement by putting in place a comprehensive loan modification program; and nearly all major lenders operating in the state were exempt as of June 16th, yet filings still dropped significantly. Among the many approved lenders whose filings dropped from May to June, Bank of America's filing declined by 48 percent, and Litton Loan Servicing Declined by 41 percent. At the same time, a handful of lenders dramatically increased their filings in June including CitiMortgage by 69 percent and Downey Savings by 45 percent. Notice of Trustee Sale filings were climbing late in the month so it remains unlikely this law will have any long-term impact on foreclosure activity.
ForeclosureRadar Report by County
RankChangeInRankCountyNDFNTSSalesPopulationPer Sale% ChangeMay 2009% ChangeJune 200810Merced51440542260527%-5%20Stanislaus101874474970222%-13%30Yuba1261169972714%9%41San Joaquin1453102193473433%-25%5-1Riverside52433817282174029%-12%60Solano85250150983821%-1%71Madera16815517984333%21%85Lake111707091519%67%90San Bernardino41812928223492022%-6%10-3Kern138497588792216%11%113San Benito40396293255%-2%12-2Sacramento269416731391102417%-20%13-2Calaveras104310732%30%14-2Contra Costa18371144933112713%-15%150Imperial141112150117422%12%160Sutter1288475127829%-13%1726Mariposa1014131540%250%180El Dorado314166135133123%44%191Placer566328245136126%-2%20-3Monterey451350297144313%-28%211Colusa322015146150%7%223Plumas12914149456%100%2310Mono10915290%125%24-3Tuolumne773436157824%125%257Amador462224158160%33%26-7Fresno113874358016053%2%27-1Nevada1035860165343%46%28-5Shasta183100106171929%83%29-1Tulare485264252172739%24%30-1Yolo219130110181033%0%31-4San Diego368122701626193522%-13%32-1Sonoma559304234207019%-22%33-3Glenn8214208517%27%34-10Tehama168292152-26%-6%350Napa1469262220532%-23%36-2Butte98769922265%8%372Alameda1530710690223623%-8%383Trinity166232850%200%39-1Ventura883558324256726%-25%402Kings1888856275824%87%4114Siskiyou2419162873220%60%422Los Angeles931462203545292430%-8%43-7Lassen105122980-8%500%44-7San Luis Obispo2211669029932%5%450Santa Clara1494852591310822%4%461Santa Barbara341229130324327%-30%47-1Orange24861602910343019%-23%48-8Santa Cruz196102763507-4%-22%49-1Mendocino713625360719%67%50-1Del Norte137420317%600%51-1San Mateo442262151489712%-9%52-1Marin156595051486%25%531Humboldt303222603769%38%542San Francisco278143701177919%9% Sign up to receive the California Foreclosure ReportCALIFORNIA FORECLOSURE REPORT METHODOLOGYRankings are based on population per foreclosure sale. NDF indicates the number of Notices of Default that were filed at the county, and NTS indicates filed Notices of Trustee Sale. Sales indicates the number of properties sold at foreclosure auction. Percentage changes are based on monthly Sales. The data presented by ForeclosureRadar is based on county records and individual sales results from daily foreclosure auctions throughout the state—not estimates or projections.