Discovery Bay, CA, November 12, 2008 - PropertyRadar, the only website that tracks every California foreclosure with daily auction updates; today issued its California Foreclosure Report for October 2008. Foreclosure sales dropped by 39.1 percent from the prior month, due to significant increases in cancellations and postponements. Under California law, scheduled foreclosure sales can be postponed for a period of up to one year, until they are either canceled or sold. Cancellations, where the home is taken out of foreclosure, increased by 78 percent in October, resulting in nearly 20 percent of foreclosure sales scheduled for October being called off. Notice of Default filings, which start the foreclosure process, continue to be significantly impacted by CA State Senate Bill 1137, as lenders work through the new requirements the law imposed. Notices of Trustee Sale, however, rebounded after a significant drop the prior month.
"It is important to note that the significant decline in October foreclosure sales cannot be directly attributed to CA State Senate Bill 1137," said Sean O'Toole, founder of PropertyRadar. "There were nearly 60,000 properties scheduled for sale at the beginning of October over which the law had no effect. The drop in foreclosure sales, therefore, can only be reasonably attributed to changes introduced by the lenders themselves and not in response to SB 1137."The increase in cancellations was led primarily by Countrywide which saw a 460 percent increase in cancellations from the prior month, and a 48 percent decline in the number of properties they sold at auction. Other lenders had similar drops in foreclosure sales, though more often due to postponement, rather than cancellation as in Countrywide's case.
Statewide, the percentage of foreclosure sales that had postponed at least once, increased from 36 percent of sales to 58 percent of sales, with the average length of postponement increasing from 24 days to 42 days." It would be a mistake to conclude that the declines in foreclosure activity indicate that the foreclosure crisis is over," continued O'Toole. "While lenders now appear to be embracing the concept of foreclosure moratoriums and loan modifications, neither typically address the core issue of negative equity. Most loan modifications focus on lowering payments to affordable levels by using unsustainably low-interest rates, not unlike the 'teaser rates' that many have blamed for the current crisis."Average discounts offered by lenders on the outstanding loan balance at foreclosure auction declined slightly from prior months, and averaged 36.1 percent statewide, with 33 percent of properties taken to auction being offered at discounts of 50 percent or more. At the county level, there was little significant change in rankings between counties, and almost all had drops in foreclosure sales activity that roughly reflected the statewide declines.
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Rankings are based on population per foreclosure sale.
NDF indicates the number of Notices of Default that were filed at the county, and NTS indicates filed Notices of Trustee Sale.
Sales indicate the number of properties sold at a foreclosure auction. Percentage changes are based on monthly Sales. The data presented by PropertyRadar is based on county records and individual sales results from daily foreclosure auctions throughout the state—not estimates or projections.