Foreclosures Still Climbing in California

Despite the fact that lenders in California are voluntarily postponing the majority of foreclosure sales - 73 percent, to be exact - ""ForeclosureRadar"":http://www.foreclosureradar.com says its market data reveals a steady increase in the number of foreclosed homes in the state sold at auction.
The company issued its monthly California Foreclosure Report this week, which shows that sales jumped 31.9 percent in May, following a 35 percent increase the prior month. Notices of trustee sale, which set the auction date and time, also rose a significant 42 percent from April, indicating that foreclosure sales are likely to continue to rise in the weeks and months ahead. However, notices of default, which are the first step in the foreclosure process, fell 4.2 percent from April.
In total, ForeclosureRadar reported, there were 17,871 foreclosed homes taken to auction in California last month. Though loan values represented a total of $8.01 billion, the company said 83 percent of the sales opened with a discounted bid that averaged just 58.6 percent of the loan value.
The majority of foreclosures put up for sale continue to be taken back by the lender. According to ForeclosureRadar, 87.9 percent, or 15,599 sales, with a total loan value of $6.98 billion, went back to the lender in May.
Third-party foreclosure auction sales continued to rise, as well, reaching 2,272 last month - that represents a 39 percent jump from the prior month, and a significant 228.3 percent increase from May 2008. Based on ForeclosureRadar's market data, more than half of third-party sales occurred in just five counties: Los Angeles, San Diego, Orange, Riverside, and Sacramento.
ForeclosureRadar tracks every foreclosure auction throughout the Golden State, making it uniquely positioned to see not only how many foreclosures were initiated, but also the current status of those foreclosures and their ultimate outcomes, whether postponed, canceled, or sold. By the end of May, the company said, there were a record 111,824 foreclosures scheduled for sale in California, yet just 15.9 percent were actually sold, versus actual sales of 49.2 percent a year earlier.
Of those foreclosures currently scheduled, ForeclosureRadar says 40 percent are being postponed to a future date at the lender's request, and another 33 percent are being postponed based on the mutual agreement of lender and borrower. The company says this clearly demonstrates that lenders are indeed delaying foreclosure in the majority of cases on their own accord. It should also be noted that lenders were under no obligation in May to offer a loan modification program, short sale, or other resolution, as they are now that the statewide foreclosure moratorium went into effect this week.
Sean O’Toole, founder and CEO of ForeclosureRadar, commented, ""While many complain that lenders are foreclosing too aggressively, and others claim a wave of foreclosures sales is imminent, the data actually shows that lenders are doing everything possible to delay foreclosure. The reality is that we have very few homeowners being foreclosed on when viewed as a percentage of those scheduled to be foreclosed on, in default, delinquent, or upside down in their mortgage.""