July 20, 2011 (Shirley Allen)
California housing defaults fell dramatically to a four year low in the second quarter of 2011 and is now less than half the record amount recorded just over two years ago according to real estate information provider DataQuick.
A total of 56,633 Notices of Default (NoDs) were recorded in the second quarter of 2011, down 17 percent from 68,239 in the first quarter of the year and down 19.2 percent from 70,051 NoDs in the same quarter of last year.
The number of NoDs was the lowest recorded in any quarter since 53,493 were recorded in the second quarter of 2007, and far less than half the record amount of 135,431 recorded in the first quarter of 2009.
Most of the loans that are still going into default today originated during the 2005 – 2007 time period and are generally serviced or owned by institutions that did not make the original loan.
“A lot of theories are being floated as to why the numbers are down. Bank policy changes. Legal challenges. Politics. Holding back temporarily so as not to flood the market. The fact of the matter is that no one really knows, outside of lending and servicing industry insiders. One thing is certain: Homeowner distress spreads fastest when home price declines are steepest. And it now appears likely that, barring some new economic shock, the worst of the price declines are behind us,” said John Walsh, DataQuick president.
Low cost areas with a median sales price of under $200,000 continued to carry the brunt of the foreclosures with 8.7 default notices per 1,000 homes. Homes in zip codes with $800,000+ plus median prices only received 2.4 default notices per 1,000 homes. The state average was 6.4 default notices per 1,000 homes.
Counties where mortgages were least likely to default were San Francisco, Marin, and Mateo. The counties that experienced the highest level of defaults were Kings, Sutter and Yuba.
Distressed properties sales made up 53 percent of all re-sales in California during the second quarter of 2011. Foreclosure re-sales accounted for 35.6 percent of the quarter’s resale activity, while short sales made up about 17.4 percent of all re-sales for the quarter.
Foreclosure sales rates varied from a low of 8.7 percent in San Francisco County to a high of 57.4 percent in Madera County.
The average amount of time that it took to foreclose on a home after a NoD was received was 10 months, up from 9.1 months from the first quarter of 2011 and also up from 9.1 months in the same quarter of 2010.
Tags: California, defaults, notice of default, NoD, bank policy changes, legal challenges, politics, median sales price, distressed properties, foreclosures, short sales
Source:
DataQuick
