California's Foreclosure Pace Slows in January
Reprinted from latimes.com
Home foreclosures in California fell dramatically in January despite the ongoing housing market crash and economic recession, a foreclosure tracking firm reported Thursday.
The number of homes sold at foreclosure auctions was down 23% in January compared with a year earlier, according to ForeclosureRadar, a seller of mortgage default data.
The 15,314 total of repossessed California homes sold at auction last month was 47% less than the total auctioned in the peak foreclosure month of July 2008, the company reported.
Additionally, 11% fewer homeowners statewide received default notices -- the first stage of foreclosure -- in January than in the same month in 2008.
ForeclosureRadar compiled its totals from county property records and daily auction results.
The declines are probably a result of delays caused by recent mergers of some of the nation’s largest banks, said Sean O’Toole, ForeclosureRadar’s founder.
O’Toole said default notices issued by Wells Fargo & Co., which acquired Wachovia Corp., declined 46% in January from December. At the same time, notices sent by JPMorgan Chase & Co., which acquired Washington Mutual Bank, fell 49%.
Lenders, however, say they have recently been more aggressive in contacting distressed borrowers and working with them to modify their loans to avoid foreclosure.
Wells Fargo spokesman Jason Menke said in an e-mailed statement that in 2008 the bank doubled its foreclosure prevention staff and was able to contact and “find a solution” for two-thirds of mortgage holders who were behind by two or more payments.
California Mortgage Bankers Assn. spokesman Dustin Hobbs said the mergers of large banks are “a plausible explanation” for the reduction in foreclosures, but he also said, “There’s certainly been a continual ramping up of loan modification efforts” by lenders.
The foreclosure process begins when a notice of default is issued after a borrower repeatedly fails to make mortgage payments. If the borrower and lender cannot agree on a way to modify the loan or otherwise settle the debt, the home is sold at auction. In most cases, the lender ends up taking back the home at auction and reselling it on the open market.
