Foreclosure notices are up but foreclosure sales are down

More than 2,000 Santa Clara County homeowners received foreclosure notices from their lenders in September, but a relative few actually had their homes sold at auction.

Foreclosure figures released Tuesday by ForeclosureRadar, a Discovery Bay company that tracks California foreclosure activity, continue a trend of the past several months: More and more homeowners are failing to make their mortgage payments but banks aren’t forcing the sale of their homes while they try to work out loan modifications.

Lenders foreclosed on 415 homes last month, down about 5 percent from August and sharply fewer than the 650 properties foreclosed on by banks in September 2008. Of these, 109 homes were sold at auction to third parties and the remaining 306 were taken back by the lender.

At the same time, lenders filed 1,257 notices of default, the first step in the foreclosure process, and 1,027 notices of trustee sale, the final step before actual sale of a foreclosed home. The numbers for August were almost the same.

The slowdown in foreclosures was good news for homeowners falling behind on their loan payments, but bad news for people shopping for a home. The decline in foreclosures has pinched the supply of homes for sale.

“There just aren’t that many foreclosures for sale,” said Jeff Hansen of Keller Williams Realty in San Jose. Hansen said banks seem to be filing notices of default more rapidly than in the past, but moving more slowly to foreclose.

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