ForeclosureRadar: California Foreclosure Sales Up 22.5% Since June
Sales at foreclosure auction in California jumped dramatically in July, increasing by more than $2 billion in combined loan value to $12.55 billion, according to ForeclosureRadar, a website that tracks every California foreclosure with daily auction updates. This represents more than 1,300 properties being taken to auction per business day, up from 415 per day one year ago.
Also, according to ForeclosureRadar's California Foreclosure Report for July notices of default declined for the third straight month. The total number of properties that are still actively scheduled for auction increased to 64,598 at the end of July, up from 59,973 at the end of June and 53,793 at the end of May. This indicates that further increases in foreclosure sales are still likely near term, despite the declining number of defaults.
Other findings from ForeclosureRadar's report include that notices of default declined by 4.6%, to a total of 40,219 filings representing $17.71 billion in loans. Also, notices of trustee sale, which are typically recorded 105 days after the notice of default, and which set the auction date and time, increased 9.8% to 39,010 filings in July. Looking at this number in comparison to notices of default, far fewer homeowners are finding a way out of foreclosure. At 97% of defaults, July's notices of trustee sale filings are nearly double the 50% that were more typical as recently as February. Sales, according to the report, increased to a total of 28,795 properties with a combined loan balance of $12.55 billion. Of those, 27,817 received no bid higher than the lender's opening bid and became bank owned.
Sales to third parties at auction continued to increase, and were up 28.7% from the prior month. Third parties purchased loans with a combined loan balance of $481 million, at an average discount of 39% to the loan balance. Despite the increase in sales to third parties, lenders continue to take back 96.6% of all properties that went to auction, and have now taken back a total of $100 billion in loans since January 2007.
"Although the declines in notices of defaults seem promising, much of this can be explained by the actions of just one lender," said Sean O'Toole, founder of ForeclosureRadar. "Ninety-one percent of the decline in notices of default since April can be attributed to Countrywide Financial. Unfortunately, this is more likely due to the challenges of integrating two companies the size of Countrywide Financial and Bank of America, than it is a fundamental shift in foreclosure activity."
Average discounts offered by lenders from the outstanding loan balance at foreclosure auction reached 45% in Merced and San Joaquin counties. Statewide discounts increased to 33% on average. San Francisco continued to see the smallest discounts at 18% on average.
According to the report, of the 243,444 notices of trustee sale filed in the last year that have concluded the foreclosure process, 85% resulted in the loss of the property at trustee sale. Only 15% averted foreclosure, and, of those, 30% have since had a new foreclosure notice filed.