Record Number of Foreclosures Cancelled

Auction investors see fewer deals, better margins

Discovery Bay, CA, July 13, 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 June 2010. Foreclosure activity was mixed in June after being down across the board in May. Filing of new foreclosure notices rose, while foreclosure sales dropped. The number of foreclosure sales that were cancelled hit an all time record in June, but the increase was primarily driven by just one lender JP Morgan Chase, and it’s acquisitions including Washington Mutual. Although the number of properties purchased by 3rd parties at auction dropped significantly, they purchased nearly the same percentage of the total properties sold, and at a better discount to market value then we’ve seen in months.

“Historically it is very unusual to have more Notice of Trustee Sale filings than Notices of Default” says Sean O’Toole, Founder and CEO of ForeclosureRadar.com. “But with skyrocketing cancellations and the possibility of failing loan modifications, this will be increasingly common, as lenders are only required to file a Notice of Trustee Sale to restart the foreclosure process.”

Foreclosure Filings

Notice of Default

Prior Month Prior Year
6.74% -45.24%

Notice of Trustee Sale

Prior Month Prior Year
21.93% 11.56%

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.

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 10-May 10-Jun
40580 49799 58623 47337 42203 47093 47530 37063 38175 36534 30478 27200 25904 31309 33139 28901 24162 25790
24890 21147 34559 31556 43355 30711 40757 34224 33112 38558 28170 28475 27220 28501 34071 31599 28098 34261

Foreclosure Outcomes

Cancellations

Prior Month Prior Year
27.09%% 153.19%

Back to Bank (REO)

Prior Month Prior Year
-23.73% -46.71%

Sold to 3rd Party

Prior Month Prior Year
-26.24% 10.73%

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.

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 10-May 10-Jun
6717 6904 6352 6707 7162 8674 10818 10004 8660 8757 10487 13287 13859 13806 16520 18437 17280 21962
14533 16419 9201 12145 15864 19713 14632 14367 13155 16018 14165 12471 13943 11983 15365 14615 13775 10506
893 1266 1094 1653 2305 2694 2691 3285 3411 3960 3683 2629 3707 3631 4031 4336 4044 2983

Foreclosure Inventories

Preforeclosure

Prior Month Prior Year
8.86% -15.69%

Scheduled for Sale

Prior Month Prior Year
-0.99% 15.74%

Bank Owned (REO)

Prior Month Prior Year
-4.89% -19.79%

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.

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 10-May 10-Jun
130550 159215 179412 185603 174243 186060 175283 171841 169860 154905 157288 146941 152322 140126 157768 152770 144105 156874
69374 64177 82390 92002 111824 113141 124874 131300 140382 149456 151573 147570 145977 145260 141669 137741 132269 130953
137331 135488 122901 112792 107762 106139 100206 98829 95479 93926 93595 89119 90551 89529 90065 89998 89513 85135

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

-0.43% 34.93%

Time to Resell – Bank

Prior Month Prior Year
5.95% 9.43%

Time to Resell – 3rd

Prior Month Prior Year
4.29% 1.19%

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.

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 10-May 10-Jun
192 198 176 171 180 173 187 185 191 195 198 222 229 224 225 239 235 234
218 223 231 234 240 244 238 228 220 219 220 224 224 224 232 247 252 267
193 186 214 196 183 168 146 147 141 131 133 141 149 150 153 162 163 170

Foreclosure Activity By County

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