Nearly a quarter-million California properties were foreclosed upon in 2008, breaking a record set the year before, according to a report Tuesday from ForeclosureRadar, a Discovery Bay company.
And in December, following a short lull induced by new state legislation, the number of "notices of default" shot back up to levels reached last summer, indicating that more foreclosures are on the way, the company said.
Last year's statewide total of 249,940 foreclosures was up 158 percent from just under 97,000 in 2007, when total foreclosures barreled ahead of the former record-high year of 1996. That year, just over 58,000 California owners lost their properties to foreclosure, according to MDA DataQuick, another company that tracks such information.
The year-end foreclosure numbers are sobering, and so was the month of December, by at least one measure. After three months in which "notices of default" were far fewer than earlier in 2008, in December lenders filed 42,421 such notices statewide, nearly doubling the total number sent to California property owners in November. Default notices are the documents lenders send to late-paying homeowners to notify them that foreclosure proceedings are beginning.
Notices of default had dropped off steeply in September following the enactment of a new state law requiring mortgage companies to give delinquent homeowners 30 days' notice before beginning the foreclosure process with a notice of default. But the rebound of default notices showed that the California Legislature's effort to reduce foreclosures by passing the law, known as SB 1137, has not been successful, said Sean O'Toole, founder of ForeclosureRadar. Part of the problem, he said, is that most homeowners who default on their loans are badly "underwater," or owe much more on their homes than the homes are now worth. "Lenders simply don't have sufficient reserves to lower principal balances enough to help homeowners in foreclosure escape the prison of debt their home now represents," O'Toole said in statement released with the data. He said the average foreclosed property has a market value $180,000 less than the owner's mortgage balance. So, it looks like foreclosures are still on the way up even though Fannie and Freddie have extended their freeze. I wonder how much worse it will be once those two fire up the foreclosure engines again....
4 comments:
I talked with a lender friend of mine that I haven't spoken with in a few months. He once worked for L.B. who of course are now, no more. I have always found him to be "right on the money" with info - so please allow me to share/blog his comments ~
I asked him his thoughts/predictions in the housing market for 2009 - he told me that buying a home in 2009 would not be in anyones interest ESPECIALLY in the IE. He said - "This year will be a "blood bath" in the housing market as there are far more Alt A & ARM loans than people realize that are going to hit that NOD and will never come back.
What you will see are the newer communities of super-sized homes getting hit hard the most. These are your communities of super-sized homes that once sold for almost a $$$mil or more and that are now sitting on the market for more than half of what they sold for and declining. He added that the stats show that most people do not have a problem walking away from their homes. While folks who have bought in the last year and who continue to buy through 2009 may get a home for 1/2 of what it was 2 years ago - it will still decline in value because their neighbors are still walking away from their homes. But then again too - many of the homes that are bought are done by investors and renters move - thus also contributing greatly to the decline in home values.
All of us here have blogged about these short sales and how long they are on the market for. I was told that about 90% of the major banks out there have haulted accepting any offer on a short sale. Main reason - the stats that keep getting worst and worst - "X" shares these with us all the time -these banks are holding on to the short sales praying and hoping that the market will do some magic to where they will not have to show it as a loss. I know that I have seen this myself - I think we all have.
My own opinion - I agree with my friend hen he said we are far beyond the realm of a recession - we are in a new realm of a "depression" and things haven't hit rock bottom yet at all.
his suggestion: Be patient - let the market undo itself...it might take longer because of the government getting involved but it will eventually correct itself and then is the time to buy that home.
Take this for what it is worth...
I withdrew an offer this morning on a really nice Amberhill house in Corona for $595,000 14 days escrow. It was a short sale and the bank took for ever and still no respond yet for over 60 days.
I really enjoy this blog. Hello from Seattle Wa. Please continue the realtard section. I have complained over the years about this problem. I guess it is not just me who feels this way. Trying to be careful with the typo's. My question is with regards to the Palm Springs area. I am thinking of coming home. Could you advise me on your opinion of this area? Realtors have told me that homes are selling fast. Can you believe it? I welcome your comments and opinions. Thanks so much. BTW, when I read your comments and from others,I just start laughing so hard.Please keep the hard truth coming. It is a bright light in a dark world.
Wiseman, the realtors are lying. Sales are slow everywhere in Socal, just somewhat better than last year. Prices are falling and there is a vast amount of foreclosures yet to hit the market.
If you want to come home, do. And rent.
The only exception I would make is that if you can buy cash and it's a relatively small portion of your net worth (say 1/3) go ahead and buy. Stocks and bonds are probably overpriced too so if you have to lose money somewhere you may as well lose some of it in real estate, assuming it's someplace you like and can very easily afford.
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