19 Aug Foreclosures Are Way Down In California
The number of California homes entering the formal foreclosure process last quarter dropped to the lowest level since late 2005, the result of a stronger economy and higher home values, a real estate information service reported.
A total of 17,524 Notices of Default (NoDs) were recorded at county recorders offices during the April-through-June period. That was down 8.8 percent from 19,215 in the prior quarter, and down 31.9 percent from 25,747 in second-quarter 2013, according to DataQuick, which is owned by Irvine-based CoreLogic, a leading global property information, analytics and data-enabled services provider.
Last quarter’s NoD tally was the lowest since fourth-quarter 2005, when 15,337 NoDs were recorded. NoD filings peaked in first-quarter 2009 at 135,431. DataQuick’s NoD statistics go back to 1992.
In first quarter 2013 California saw 18,568 NoDs filed. In last year’s second quarter the number was 25,747. In third quarter 2013 it was 20,314. Fourth quarter was 18,120. In first quarter 2014 the tally was 19,215, and last quarter it was 17,524.
In Orange County, the total number of “Notice of Defaults” in Q2 dropped 31.3% from 1,641 in Q2 2013 to 1,134 in Q2 2014. And, the total number of “Notice of Trustee Sale” dropped 36.2% from 439 to 280 in the same period. Observers at the Trustee’s Sale Auctions have told me that only about 3 to 4 properties per day are being sold to 3rd Party Investors at the auction. The vast majority are being postponed and some are going back to the lender.
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 more than five years, indicating that weak underwriting standards peaked then.
Trustees Deeds recorded (TDs), or the final loss of a home to the foreclosure process, totaled 7,392 last quarter – the lowest level for any quarter since 6,078 TDs were filed in fourth-quarter 2006. The all-time peak was 79,511 foreclosures in third-quarter 2008. The state’s all-time low was 637 in second-quarter 2005, DataQuick reported.
Foreclosure resales – properties foreclosed on in the prior 12 months – accounted for 6.1 percent of all California resale activity last quarter. That was down from a revised 7.6 percent the prior quarter and down from 11.5 percent a year ago. Foreclosure resales peaked at 57.8 percent in first-quarter 2009. So, sales of foreclosed homes are down about 90% from the peak… short sales are way down too.