It took banks 27.9 percent longer, or 225 days, to foreclose on a property in California last month than it did in March 2009, and 0.45 percent longer than it did in February, according to data tracked by foreclosure data company ForeclosureRadar.com.
The foreclosure process is likely to take longer in the future, the report said, since banks delayed sending notice of trustee sale filings to borrowers until an average of 188 days had passed since the notice of default, up from 142 days in February.
That extra delay pushed ForeclosureRadar’s preforeclosure inventory estimate up 12.6 percent to 157,768, compared to February. The inventory estimate fell 12.1 percent year-over-year in March.
The inventory of bank-owned properties (REOs) in California dropped 26.5 percent year-over-year and 1.4 percent month-to-month, ForeclosureRadar reported.
Foreclosure filings have dived since last year, "when lenders caught up on a backlog of filings after delays caused by new notice requirements introduced in California Senate Bill 1137," ForeclosureRadar’s report said.
The bill prevented lenders from issuing a notice of default before contacting the homeowner to explore options to avoid foreclosure and delayed filings for 30 days after that first contact.
Compared to March 2009, notices of default fell 44.6 percent to 32,484, and notices of trustee sale dropped 3.1 percent to 33,489, for a total of 65,973 filings last month. Both increased month-to-month, however: 3.8 percent and 17.5 percent, respectively.
"Despite efforts to promote foreclosure alternatives like loan modifications and short sales, the simple reality is that there isn’t a program for everyone," said Sean O’Toole, ForeclosureRadar’s founder and CEO, in a statement. "Unraveling trillions in excess debt will take time, and foreclosure is part of the solution, not the problem."
The percentage of foreclosures that ultimately became REOs rose 66.3 percent year-over year, to 15,304 properties. Month-to-month, that figure rose 28.1 percent.
At the same time, foreclosure cancellations shot up 160 percent year-over year and 20.2 percent month-to-month.
"The increase in cancellations appears to be primarily driven by filing errors, as evidenced by an early cancellation or by statutory requirement, (and) the sale being postponed beyond the maximum time allowed under law. Still, more than half of the 16,513 cancellations occurred mid-foreclosure, indicating a likely loan modification or short sale," the report said.
Homes scheduled to be sold at trustee-sale auctions rose 72 percent, to 141,669 year-over-year, and fell 2.47 percent month-to-month. And the sale of foreclosure properties trustee-sale auctions in California climbed 92.3 percent in March compared to the same month in 2009.
A year ago, most major lenders were under voluntary foreclosure-sale moratoriums after Rep. Barney Frank, D-Mass., and the Office of Thrift Supervision asked them to delay foreclosures until the Home Affordable Modification Program (HAMP) was put in place.
March 2010 foreclosure sales at trustee-sale auctions rose 24.2 percent in the Golden State compared to February 2010. Most (79.2 percent) went back to the lender bank and the rest went to third parties, mostly investors.
Third-party purchases of foreclosures at trustee sales achieved a new record last month, hitting above 4,000 for the first time. Such purchases rose a whopping 266 percent from March 2009, to 4,004 sales from 1,094 sales. They increased 11 percent month-to-month.
The purchases totaled more than $840 million and the buyers got an average discount of 15.8 percent off market value, the report said.
ForeclosureRadar’s monthly reports are based on county records and statewide sales results from daily trustee sale auctions.
***
What’s your opinion? Leave your comments below or send a letter to the editor.
