Sophia Zaller 7:30 a.m., July 30
Foreclosures Flat, but Over 4,000 San Diego Homes Are Owned By Banks
The latest statistics on distressed properties, issued earlier this week on the website ForeclosureRadar, are a mixed bag so far as California is concerned.
Reflecting on the month of May, both new foreclosure starts and trustee sales, the final step in the foreclosure process, are up slightly over last month but down overall from last year, with 5.1 percent fewer new notices of default issued and 37.3 percent fewer auctions scheduled.
New properties are falling into default in San Diego County at a virtually unchanged rate, with 1,439 notices of default filed, signaling a borrower is at least 90 days behind on payments. But as fewer foreclosure sales are scheduled as borrowers seek alternatives such as loan modification or short sale, bank-owned inventory in the region has fallen by more than a third in the last year, though 4,256 homes were still reported as being owned by banks last month and another 13,000 more were in foreclosure.
It now takes an average of nine months for a lender to complete a foreclosure locally, once the notice of default is filed. If the property reverts back to bank ownership, it’s usually another eight months until the house is sold to a new user, either an owner occupant or an investor.
“I continue to find the push to ‘Stop’ foreclosures, as we are currently seeing play out in the California legislature, ludicrous. The real problem is negative equity, and the only thing stopping foreclosures will accomplish is insuring that we are stuck with the negative equity problem for far longer then necessary.” says Sean O'Toole, the founder and CEO of ForeclosureRadar. “I completely get why folks are mad at both the banks and the situation. However, stopping foreclosures will lead to a much longer economic recovery, increased blight, fewer jobs, lower property tax receipts, and fewer opportunities for new homebuyers and investors.”