10:55 p.m., Aug. 31
Foreclosure Rates Continue to Fall
Foreclosure activity was down across the board last month, the tracking website ForeclosureRadar reports, and that could be a bad thing for investors who have been cashing in on the hordes of overextended and/or underemployed borrowers losing their homes.
“Foreclosure declines would be wonderful news if they were being driven by a true market recovery in which hundreds of thousands were no longer unable to make payments, and millions were no longer upside down,” says Sean O’Toole, the website’s founder and CEO. “That is not the reality today. Instead we are seeing unprecedented government intervention into the foreclosure process leaving underwater homeowners in limbo, while stealing opportunity from investors and first time buyers,” he laments.
O’Toole further states that legislation pending in California championed by state Attorney General Kamala Harris could “bring foreclosure activity to a near halt.” New foreclosure filings in the state were down 23.68 percent to 17,707 in April as compared to March. That’s nearly 69 percent below the peak of foreclosure activity in 2009.
In San Diego, new foreclosure filings were down 13.75 percent to 1,411, while properties nearing the end of the process where they’re sold at auction also dropped 16.93 percent to 1,104. Of properties that weren’t postponed and actually made it to auction, 261 failed to attract sufficient bids from investors and reverted to the bank, while 241 were sold off to individuals looking to either convert them to rentals or flip them to new buyers for a quick profit.
With the number of properties going to investors and reverting to bank ownership are nearly equal, the trend toward cash buyers emerging at auction continues. In April 2011, nearly three fourths of properties offered for auction failed to sell.
Over 17,000 properties in San Diego County are either in default or currently owned by foreclosing banks. It now takes lenders an average of 254 days to foreclose on a delinquent homeowner, down from 324 days last year.