The number of default notices in the second quarter falls 43.8% compared with the same period in 2009. Meanwhile, banks step up repossession of foreclosed homes.
By Alejandro Lazo, Los Angeles Times
The number of Californians entering foreclosure slid dramatically in the second quarter to a three-year low as the fallout from the worst of the housing crisis continued to abate.
Default notices, the first stage of the foreclosure process initiated by banks on troubled homeowners, plummeted 43.8% in the second quarter over the same period last year to 70,051, and 13.6% from the first three months of the year, research firm MDA DataQuick of San Diego said Wednesday.
Well, we’ve got some good news, and we’ve got some bad news. The good news is fewer Golden State homedebtors are defaulting on their mortgages. The bad news is that there’s plenty of already defaulted property for the banks to foreclose on, and foreclose they did. The average loan has taken 9.1 months from Notice of Default to foreclosure, and the number of California NODs peaked in the first quarter of 2009.
"We are now three-plus years into the housing crisis, and at this point of time we are seeing stabilization across the board," said Stuart Gabriel, director of UCLA‘s Ziman Center for Real Estate. "The stabilization is in fits and spurts … but it is evidenced in a variety of indicators."
One of the things that the subprime mortgage meltdown has led to are a rash of professors at actual accredited institutions of higher learning using the word “evidence” as a verb. You’ll have to read the article yourself to find out what the Real Estate Erudite from Cal and USC have to say. Well, I’ll give you a hint. The guy from USC thinks fewer people are going to walk away from underwater mortgages than predicted, but didn’t bother to share any actual reasoning for this supposition other than home prices trending back up. It’s fairly easy to find experts suggesting that housing prices will stay down and could go even lower, so I definitely want a glass of that SoCal Kool-Aid.
But don’t forget the “Bad News” portion: 4.4% more trustee’s deeds were filed on California properties from the same quarter a year earlier, and 11.2% from the previous quarter, for a total of 47,669. The last stage of foreclosure is recording the TD. Foreclosure filings were up 38% nationally, and California was well represented in those numbers.
Mortgage rates went down this week, from 4.57 to 4.56 percent for a 30 year fixed conventional loan. (These are national averages, and California rates are usually higher.) That last .01 percent is going to be the trigger for everyone who refinanced at 4.59% to jump in for a new set of appraisal documents. And all those newly foreclosed homeless are going to jump at this opportunity, right? Best of all, you’re all going to get a chance to refinance at 4.55%, because Bernanke (Chairman of the Federal Reserve, but you knew that) says as the economic outlook is “unusually uncertain” he may have to lower interest rates even more!