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For the second quarter of 2011, California homes entering the foreclosure process decreased to their lowest rate in four years, according to ""DataQuick,"":http://www.dataquick.com/about/ a San Diego-based company that tracks nationwide real estate activity.
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DataQuick attributes the decrease to an increasingly stable housing market and new mortgage servicing policies.
""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,"" said John Walsh, DataQuick president.
""The fact of the matter is that no one really knows, outside of lending and servicing industry insiders,"" Walsh continues. ""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.""
The number of notices of default decreased 17 percent from April to June when compared with the previous quarter and 19.2 percent when compared with the second quarter of last year. It was the lowest rate reported since the second quarter of 2007.
DataQuick reports that most of the loans defaulting today were originated between 2005 and 2007 when weak underwriting standards were most prevalent.
[COLUMN_BREAK]While notices of default decreased on both a quarterly and annual basis in all home-price ranges for the quarter, declines were greatest in the least expensive communities, which is where the greatest amount of foreclosures have occurred in the last few years.
Trustee Deeds, actual foreclosures, decreased 1.4 percent in the second quarter of 2011 from the previous quarter and 10.9 percent from the second quarter of 2010.
Foreclosures declined most in high-cost neighborhoods, while foreclosure concentrations were greatest in low-cost areas.
Lenders with the most foreclosed properties during the quarter were JPMorgan Chase, Wells Fargo, and Bank of America.
San Francisco, Marin, and San Mateo counties had the lowest probability of default, while Kings, Sutter, and Yuba counties had the highest probability of default.
Foreclosure resales made up 35.6 percent of California resales throughout the quarter, showing a decrease from the previous quarter's 39.8 percent and a slight increase from the same quarter last year at 35.5 percent.
Short sales accounted for 17.4 percent of resales for the quarter, showing a decrease from both the previous quarter and the previous year, which were 18.1 percent and 18.9 percent respectively.
Foreclosures took an average of 10 months to complete, according to DataQuick's quarterly report. During both the previous quarter and the same quarter last year, foreclosures took an average of 9.1 months.
DataQuick suggests the increase could be the result of lender backlogs, legal and regulatory obstacles, and extra time required to attempt foreclosure alternatives.
The median sales price in the second quarter of 2011 in California was $250,000, a 7.4 percent decrease from the second quarter of 2010.
