Foreclosure Radar reports that notices of default (NODs) recorded in California for February amounted to 31,004, a jump of 20% from the 25,904 in January. Notice of trustee’s sales (NOTS) filed in February increased by 4% to 28,195, from 27,220 in January. Both the increases in NODs and NOTS reverse the three-month trend of decreases seen since the November cyclical slowdown in foreclosures at the end of each year. [For more information on the trend of NOD/NOTS, see the December 2009 Market Chart NODs and Trustee’s Deeds: Grim signs of real estate’s present condition]
Foreclosure inventory of real estate owned (REO) properties for February in California was 11,943. This is down by 14% from the January inventory of 13,943. This decrease follows the slight increase in REO inventory from December to January.
first tuesday take:
The current monthly rises in NODs come after the year-long decrease in NOD recordings in 2009. On the other hand NOTS had a slow, steady increase in 2009, until their normal end-of-year dip.
The increase of NOTS, the final step in foreclosure, means lenders have begun to move beyond the extend and pretend modification delusion to finish the NOD foreclosure process. If these trends continue (and they most likely will) it will mean a higher REO inventory in 2010 as REOs once again inundate what has becomes a slower home sales market than 2009.
Lenders are desperate to stave off their management of another flood of REOs and are beginning to consider other options. Change is evident in recent conversations by lenders about the possibility of conditional future principle reductions. [For more information, see the first tuesday December 2009 article, Wells Fargo: ‘leading the way’ in cramdowns? and the first tuesday April article, Lenders attempt to lock homeowners into paying on underwater homes]
Re: “Foreclosure Starts Up Nearly 20% In California” from Foreclosure Radar