(Dataquick) -- La Jolla, CA.——The number of California homes entering the formal foreclosure process during the first quarter declined to its lowest level in almost five years, the result of a more stable economy and housing market, as well as policies that increasingly favor short sales, a real estate information service reported.
A total of 56,258 Notices of Default (NODs) were recorded at county recorders offices during the first quarter of this year. That was down 8.5 percent from 61,517 for the prior three months, and down 17.6 percent from 68,239 in first-quarter 2011, according to San Diego-based DataQuick.
Last quarter’s tally of 56,258 NODs was the lowest since 53,943 NODs were recorded in second-quarter 2007. NOD filings peaked in first-quarter 2009 at 135,431.
“Prices peaked five years ago and then started to fall off a cliff. Foreclosure activity goes up when property values decline, and the worst of that decline was happening three years ago. Right now, property values in many areas appear flat,” said John Walsh, DataQuick president.
“A few years back, there were some breathtakingly negative forecasts making the rounds regarding the foreclosure problem, some of which have played out, and some of which haven’t. The ‘shadow supply’ has yet to result in a second huge wave of foreclosures. The ‘reset problem’ hasn’t really materialized, largely because interest rates are resetting down, not up. And, remarkably, whole batches of presumed ‘toxic’ mortgages continue to perform. There’s no doubt that housing, especially negative equity, is one of the biggest drags on a struggling economy, but it’s not necessarily playing out the way some pundits thought,” he said.
The most active “beneficiaries” in the formal foreclosure process last quarter were Bank of America (10,419), Wells Fargo (7,577), Bank of New York (5,380) and JP Morgan (5,343).
The trustees who pursued the highest number of defaults last quarter were ReconTrust Co (mostly for Bank of America and Bank of New York), Quality Loan Service Corp (Bank of America), NDEx West (Wells Fargo) and Cal-Western Reconveyance Corp (Wells Fargo).
Most of the loans going into default are still from the 2005-2007 period. The median origination quarter for defaulted loans is still third-quarter 2006. That has been the case for three years, indicating that weak underwriting standards peaked then.
Although NOD filings dropped across the home price spectrum last quarter, they remained far more concentrated in California’s most affordable communities. Zip codes with first-quarter 2012 median sale prices below $200,000 collectively saw 8.9 NODs filed for every 1,000 homes in those zip codes, while the ratio was 5.6 NODs filed per 1,000 homes for zip codes with $200,000 to $800,000 medians. For the group of zip codes with median sale prices above $800,000, there were 2.3 NODs filed per 1,000 homes.
On primary mortgages, California homeowners were a median nine months behind on their payments when the lender filed the Notice of Default. The borrowers owed a median $17,897 on a median $319,418 mortgage.
On home equity loans and lines of credit in default, borrowers owed a median $4,978 on a median $75,000 credit line. The amount of the credit line that was actually in use cannot be determined from public records.
San Diego-based DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts. Notices of Default are recorded at county recorders offices and mark the first step of the formal foreclosure process.
Although 56,259 default notices were filed last quarter, they involved 55,368 homes because some borrowers were in default on multiple loans (e.g. a primary mortgage and a line of credit).
Of the state’s larger counties, mortgages were least likely to go into default in Marin, San Francisco, and San Mateo counties. The probability was highest in Tulare, Sacramento and San Joaquin counties.
Trustees Deeds recorded (TDs), or the actual loss of a home to the formal foreclosure process, totaled 30,261 during the first quarter. That was down 3.2 percent from 31,260 filed the prior quarter, and down 29.7 percent from 43,052 during first-quarter 2011.
Last quarter’s Trustees Deeds total was the lowest since the third quarter of 2007, when 24,209 were filed. The all-time peak was 79,511 in third-quarter 2008. The state’s all-time low was 637 in the second quarter of 2005, DataQuick reported.
Just as with NOD filings, foreclosures remained far more concentrated in the state’s most affordable neighborhoods. Zip codes with first-quarter 2012 median sale prices below $200,000 collectively saw 5.9 homes foreclosed on for every 1,000 homes, compared with 2.6 foreclosures per 1,000 homes for zip codes with medians between $200,000 and $800,000 and less than one – 0.8 – foreclosure per 1,000 homes in the group of zip codes with $800,000-plus medians.
While 1.45 million of California’s 8.7 million houses and condos have been involved in a foreclosure proceeding over the past five years, 835,000 (9.6 percent) have been lost to foreclosure.
Foreclosure resales – homes that had been foreclosed on over the past 12 months – accounted for 33.5 percent of California resale activity last quarter, down from a revised 33.6 percent the prior quarter and 39.8 percent a year ago. The statewide figure peaked at 57.8 percent in the first quarter of 2009. Foreclosure resales varied significantly by county last quarter, from 9.0 percent in San Francisco County to 55.2 percent in Yuba County.
Short sales – transactions where the sale price fell short of what was owed on the property – made up an estimated 20.2 percent of statewide resale activity last quarter. That was up from an estimated 19.6 percent the prior quarter and up from 18.1 percent a year earlier.
On average, homes foreclosed on last quarter took 8.5 months to wind their way through the formal foreclosure process, beginning with an NOD. That’s down from an average of 9.7 months the prior quarter and 9.1 months a year earlier.
At formal foreclosure auctions held statewide last quarter, an estimated 33.4 percent of the foreclosed properties were bought by investors or others who don’t appear to be lender or government entities. That was up from an estimated 29.2 percent the previous quarter and up from 23.2 percent from a year earlier, DataQuick reported.
(chart)
Notices of Default (Trustees Deeds further down)
Houses and condos
County/Region 2011Q1 2012Q1 Yr/Yr%
Los Angeles 13,957 11,443 -18.0%
Orange 4,652 3,733 -19.8%
San Diego 4,758 4,185 -12.0%
Riverside 6,769 5,542 -18.1%
San Bernardino 5,514 4,722 -14.4%
Ventura 1,437 1,255 -12.7%
Imperial 289 257 -11.1%
Socal 37,376 31,137 -16.7%
San Francisco 466 340 -27.0%
Alameda 2,373 1,860 -21.6%
Contra Costa 2,778 2,251 -19.0%
Santa Clara 2,253 1,496 -33.6%
San Mateo 829 612 -26.2%
Marin 309 209 -32.4%
Solano 1,301 1,146 -11.9%
Sonoma 864 698 -19.2%
Napa 215 179 -16.7%
Bay Area 11,388 8,791 -22.8%
Santa Cruz 300 220 -26.7%
Santa Barbara 598 481 -19.6%
San Luis Obispo 482 291 -39.6%
Monterey 602 471 -21.8%
Coast 1,982 1,463 -26.2%
Sacramento 3,797 3,464 -8.8%
San Joaquin 1,853 1,572 -15.2%
Placer 933 735 -21.2%
Kern 1,865 1,641 -12.0%
Fresno 1,946 1,555 -20.1%
Madera 356 262 -26.4%
Merced 601 415 -30.9%
Tulare 970 796 -17.9%
Yolo 322 277 -14.0%
El Dorado 479 340 -29.0%
Stanislaus 1,384 1,170 -15.5%
Kings 237 186 -21.5%
San Benito 114 79 -30.7%
Yuba 194 189 -2.6%
Colusa 42 32 -23.8%
Sutter 205 177 -13.7%
Central Valley 15,298 12,890 -15.7%
Mountains* 732 663 -9.4%
North Calif* 1,463 1,314 -10.2%
Statewide* 68,239 56,258 -17.6%
*Includes other counties
Trustees Deeds Recorded
Houses and condos
County/Region 2011Q1 2012Q1 Yr/Yr%
Los Angeles 6,836 4,723 -30.9%
Orange 1,926 1,521 -21.0%
San Diego 2,902 1,862 -35.8%
Riverside 4,990 3,291 -34.0%
San Bernardino 3,967 2,713 -31.6%
Ventura 649 552 -14.9%
Imperial 265 192 -27.5%
Socal 21,535 14,854 -31.0%
San Francisco 181 151 -16.6%
Alameda 1,307 1,152 -11.9%
Contra Costa 1,891 1,285 -32.0%
Santa Clara 952 681 -28.5%
San Mateo 346 261 -24.6%
Marin 146 118 -19.2%
Solano 976 679 -30.4%
Sonoma 519 397 -23.5%
Napa 119 111 -6.7%
Bay Area 6,437 4,835 -24.9%
Santa Cruz 164 135 -17.7%
Santa Barbara 314 258 -17.8%
San Luis Obispo 263 187 -28.9%
Monterey 421 293 -30.4%
Coast 1,162 873 -24.9%
Sacramento 3,096 2,225 -28.1%
San Joaquin 1,463 985 -32.7%
Placer 612 451 -26.3%
Kern 1,640 981 -40.2%
Fresno 1,383 1,004 -27.4%
Madera 319 204 -36.1%
Merced 607 333 -45.1%
Tulare 615 441 -28.3%
Yolo 272 157 -42.3%
El Dorado 302 198 -34.4%
Stanislaus 1,186 827 -30.3%
Kings 199 116 -41.7%
San Benito 63 63 0.0%
Yuba 194 136 -29.9%
Colusa 43 28 -34.9%
Sutter 170 146 -14.1%
Central Valley 12,164 8,295 -31.8%
Mountains* 564 438 -22.3%
North Calif* 1,190 966 -18.8%
Statewide* 43,052 30,261 -29.7%
*Includes other counties
Source: DataQuick, DQNews.com
