A number of lenders appear to have self-imposed California's latest foreclosure moratorium on themselves, despite having received an exemption from it
Discovery Bay, CA (PRWEB) July 15, 2009
ForeclosureRadar (http://www.foreclosureradar.com ), the only website that tracks every California foreclosure, and provides daily auction updates, issued its monthly 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 they 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 canceled. 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.
CALIFORNIA FORECLOSURE REPORT METHODOLOGY
Rankings are based on population per foreclosure sale. NOD 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.
ForeclosureRadar is the only web site that tracks every foreclosure in California with daily updates on all foreclosure auctions. ForeclosureRadar features unprecedented tools to search, manage, track and analyze preforeclosure, foreclosure auction, short sale and bank owned real estate. The web site was launched in May 2007 by Sean O'Toole, who spent 15 years building and launching software companies before entering the foreclosure business in 2002 where he successfully bought and sold more than 150 foreclosure properties. ForeclosureRadar is an indispensable resource for real estate agents, brokers, investors, lenders, mortgage brokers, attorneys and other real estate professionals specializing in the California real estate market.