Dataquick: Further Decline in California Foreclosure Activity

by 25 Apr 2012

Foreclosure, <a href=short sale, agent, REO, real estate, broker, realtor, refi, mortgage" class="alignleft size-full wp-image-6342" height="194" src="http://www.thenichereport.com/wp-content/uploads/2012/02/Foreclosure4.jpg" title="Foreclosure" width="259" />(Dataquick) -- La Jolla, CA.——The number of California homes entering the formal foreclosure process during the first quarter declined to its lowest level in almost five years, the result of a more stable economy and housing market, as well as policies that increasingly favor short sales, a real estate information service reported.

     A total of 56,258 Notices of Default (NODs) were recorded at county recorders offices during the first quarter of this year. That was down 8.5 percent from 61,517 for the prior three months, and down 17.6 percent from 68,239 in first-quarter 2011, according to San Diego-based DataQuick.

     Last quarter’s tally of 56,258 NODs was the lowest since 53,943 NODs were recorded in second-quarter 2007. NOD filings peaked in first-quarter 2009 at 135,431.

     “Prices peaked five years ago and then started to fall off a cliff. Foreclosure activity goes up when property values decline, and the worst of that decline was happening three years ago. Right now, property values in many areas appear flat,” said John Walsh, DataQuick president.

     “A few years back, there were some breathtakingly negative forecasts making the rounds regarding the foreclosure problem, some of which have played out, and some of which haven’t. The ‘shadow supply’ has yet to result in a second huge wave of foreclosures. The ‘reset problem’ hasn’t really materialized, largely because interest rates are resetting down, not up. And, remarkably, whole batches of presumed ‘toxic’ mortgages continue to perform. There’s no doubt that housing, especially negative equity, is one of the biggest drags on a struggling economy, but it’s not necessarily playing out the way some pundits thought,” he said.

     The most active “beneficiaries” in the formal foreclosure process last quarter were Bank of America (10,419), Wells Fargo (7,577), Bank of New York (5,380) and JP Morgan (5,343).

     The trustees who pursued the highest number of defaults last quarter were ReconTrust Co (mostly for Bank of America and Bank of New York), Quality Loan Service Corp (Bank of America), NDEx West (Wells Fargo) and Cal-Western Reconveyance Corp (Wells Fargo).

     Most of the loans going into default are still from the 2005-2007 period. The median origination quarter for defaulted loans is still third-quarter 2006. That has been the case for three years, indicating that weak underwriting standards peaked then.

     Although NOD filings dropped across the home price spectrum last quarter, they remained far more concentrated in California’s most affordable communities. Zip codes with first-quarter 2012 median sale prices below $200,000 collectively saw 8.9 NODs filed for every 1,000 homes in those zip codes, while the ratio was 5.6 NODs filed per 1,000 homes for zip codes with $200,000 to $800,000 medians. For the group of zip codes with median sale prices above $800,000, there were 2.3 NODs filed per 1,000 homes. 

     On primary mortgages, California homeowners were a median nine months behind on their payments when the lender filed the Notice of Default. The borrowers owed a median $17,897 on a median $319,418 mortgage.

     On home equity loans and lines of credit in default, borrowers owed a median $4,978 on a median $75,000 credit line. The amount of the credit line that was actually in use cannot be determined from public records.

     San Diego-based DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts. Notices of Default are recorded at county recorders offices and mark the first step of the formal foreclosure process.

     Although 56,259 default notices were filed last quarter, they involved 55,368 homes because some borrowers were in default on multiple loans (e.g. a primary mortgage and a line of credit).

     Of the state’s larger counties, mortgages were least likely to go into default in Marin, San Francisco, and San Mateo counties. The probability was highest in Tulare, Sacramento and San Joaquin counties.

     Trustees Deeds recorded (TDs), or the actual loss of a home to the formal foreclosure process, totaled 30,261 during the first quarter. That was down 3.2 percent from 31,260 filed the prior quarter, and down 29.7 percent from 43,052 during first-quarter 2011.

     Last quarter’s Trustees Deeds total was the lowest since the third quarter of 2007, when 24,209 were filed. The all-time peak was 79,511 in third-quarter 2008. The state’s all-time low was 637 in the second quarter of 2005, DataQuick reported.

     Just as with NOD filings, foreclosures remained far more concentrated in the state’s most affordable neighborhoods. Zip codes with first-quarter 2012 median sale prices below $200,000 collectively saw 5.9 homes foreclosed on for every 1,000 homes, compared with 2.6 foreclosures per 1,000 homes for zip codes with medians between $200,000 and $800,000 and less than one – 0.8 – foreclosure per 1,000 homes in the group of zip codes with $800,000-plus medians.

     While 1.45 million of California’s 8.7 million houses and condos have been involved in a foreclosure proceeding over the past five years, 835,000 (9.6 percent) have been lost to foreclosure.

     Foreclosure resales – homes that had been foreclosed on over the past 12 months – accounted for 33.5 percent of California resale activity last quarter, down from a revised 33.6 percent the prior quarter and 39.8 percent a year ago. The statewide figure peaked at 57.8 percent in the first quarter of 2009. Foreclosure resales varied significantly by county last quarter, from 9.0 percent in San Francisco County to 55.2 percent in Yuba County.

     Short sales – transactions where the sale price fell short of what was owed on the property – made up an estimated 20.2 percent of statewide resale activity last quarter. That was up from an estimated 19.6 percent the prior quarter and up from 18.1 percent a year earlier.

     On average, homes foreclosed on last quarter took 8.5 months to wind their way through the formal foreclosure process, beginning with an NOD. That’s down from an average of 9.7 months the prior quarter and 9.1 months a year earlier. 

     At formal foreclosure auctions held statewide last quarter, an estimated 33.4 percent of the foreclosed properties were bought by investors or others who don’t appear to be lender or government entities. That was up from an estimated 29.2 percent the previous quarter and up from 23.2 percent from a year earlier, DataQuick reported.

(chart)

Notices of Default (Trustees Deeds further down)

Houses and condos

                                                

County/Region              2011Q1      2012Q1     Yr/Yr%

 

Los Angeles                13,957      11,443     -18.0%

Orange                      4,652       3,733     -19.8%

San Diego                   4,758       4,185     -12.0%

Riverside                   6,769       5,542     -18.1%

San Bernardino              5,514       4,722     -14.4%

Ventura                     1,437       1,255     -12.7%

Imperial                      289         257     -11.1%

Socal                      37,376      31,137     -16.7%

 

San Francisco                 466         340     -27.0%

Alameda                     2,373       1,860     -21.6%

Contra Costa                2,778       2,251     -19.0%

Santa Clara                 2,253       1,496     -33.6%

San Mateo                     829         612     -26.2%

Marin                         309         209     -32.4%

Solano                      1,301       1,146     -11.9%

Sonoma                        864         698     -19.2%

Napa                          215         179     -16.7%

Bay Area                   11,388       8,791     -22.8%

 

Santa Cruz                    300         220     -26.7%

Santa Barbara                 598         481     -19.6%

San Luis Obispo               482         291     -39.6%

Monterey                      602         471     -21.8%

Coast                       1,982       1,463     -26.2%

 

Sacramento                  3,797       3,464      -8.8%

San Joaquin                 1,853       1,572     -15.2%

Placer                        933         735     -21.2%

Kern                        1,865       1,641     -12.0%

Fresno                      1,946       1,555     -20.1%

Madera                        356         262     -26.4%

Merced                        601         415     -30.9%

Tulare                        970         796     -17.9%

Yolo                          322         277     -14.0%

El Dorado                     479         340     -29.0%

Stanislaus                  1,384       1,170     -15.5%

Kings                         237         186     -21.5%

San Benito                    114          79     -30.7%

Yuba                          194         189      -2.6%

Colusa                         42          32     -23.8%

Sutter                        205         177     -13.7%

Central Valley             15,298      12,890     -15.7%

 

Mountains*                    732         663      -9.4%

 

North Calif*                1,463       1,314     -10.2%

 

Statewide*                 68,239      56,258     -17.6%

 

*Includes other counties

 

Trustees Deeds Recorded

Houses and condos

                                               

 

County/Region  2011Q1      2012Q1     Yr/Yr%

Los Angeles                 6,836       4,723     -30.9%

Orange                      1,926       1,521     -21.0%

San Diego                   2,902       1,862     -35.8%

Riverside                   4,990       3,291     -34.0%

San Bernardino              3,967       2,713     -31.6%

Ventura                       649         552     -14.9%

Imperial                      265         192     -27.5%

Socal                      21,535      14,854     -31.0%

 

San Francisco                 181         151     -16.6%

Alameda                     1,307       1,152     -11.9%

Contra Costa                1,891       1,285     -32.0%

Santa Clara                   952         681     -28.5%

San Mateo                     346         261     -24.6%

Marin                         146         118     -19.2%

Solano                        976         679     -30.4%

Sonoma                        519         397     -23.5%

Napa                          119         111      -6.7%

Bay Area                    6,437       4,835     -24.9%

 

Santa Cruz                    164         135     -17.7%

Santa Barbara                 314         258     -17.8%

San Luis Obispo               263         187     -28.9%

Monterey                      421         293     -30.4%

Coast                       1,162         873     -24.9%

 

Sacramento                  3,096       2,225     -28.1%

San Joaquin                 1,463         985     -32.7%

Placer                        612         451     -26.3%

Kern                        1,640         981     -40.2%

Fresno                      1,383       1,004     -27.4%

Madera                        319         204     -36.1%

Merced                        607         333     -45.1%

Tulare                        615         441     -28.3%

Yolo                          272         157     -42.3%

El Dorado                     302         198     -34.4%

Stanislaus                  1,186         827     -30.3%

Kings                         199         116     -41.7%

San Benito                     63          63       0.0%

Yuba                          194         136     -29.9%

Colusa                         43          28     -34.9%

Sutter                        170         146     -14.1%

Central Valley             12,164       8,295     -31.8%

 

Mountains*                    564         438     -22.3%

 

North Calif*                1,190         966     -18.8%

 

Statewide*                 43,052      30,261     -29.7%

 

*Includes other counties

 

 

Source: DataQuick, DQNews.com

COMMENTS

  • by Victoria | 4/27/2012 5:56:36 AM

    But the crisis still remains in the south. Nevada stats are not good.

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