Record Number of Foreclosures Cancelled in California
Original Post Date: July 13, 2010
By: Carrie Bay
The number of foreclosure sales that were cancelled in California hit an all-time record in June, according to a report released Tuesday by ForeclosureRadar, a locally based company that tracks every foreclosure in the state and provides daily auction updates.
The company characterized foreclosure activity in the Golden State as “mixed” last month, with filings of new foreclosure notices on the rise and foreclosure sales down. That assessment follows two straight months in which ForeclosureRadar reported declines across-the-board at every stage of the foreclosure process.
In total, 10,506 foreclosures were cancelled in California last month before reaching the auction sale phase, according to ForeclosureRadar’s market data. The figure represents a 27 percent increase from May and is 153 percent higher than in June 2009. ForeclosureRadar explained that the increase was primarily driven by just one lender, JP Morgan Chase and its acquisition of Washington Mutual loans.
Notices of Default filed against delinquent homeowners – the first step in the foreclosure process – edged up nearly 7 percent from May to June, ForeclosureRadar reported, but were down more than 45 percent compared to June 2009.
Notice of Trustee Sale filings, which serve as the homeowner’s final notice before the home is auctioned, increased on both a monthly and annual basis in June. Compared to the previous month, filings were up nearly 22 percent, and were nearly 12 percent above year-ago levels.
During the month of June, ForeclosureRadar tracked a total of 25,790 new Notices of Default and 34,261 Notices of Trustee Sale.
“Historically it is very unusual to have more Notice of Trustee Sale filings than Notices of Default,” said 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.”
ForeclosureRadar’s data shows that banks took back 10,506 properties in June, nearly 24 percent fewer than they did in May. The company puts California’s total REO inventory at 85,135 homes, down from 87,964 in May and nearly 20 percent lower than it was a year ago.
The number of properties purchased by third parties at auction dropped significantly in June to 2,983, but they purchased nearly the same percentage of the total properties sold, and at a better discount to market value than ForeclosureRadar says it’s seen in months. Last month, the average bid amount on a home sold at foreclosure auction in California was 18.9 percent below market value.