Recordings of notices of defaults (NODs) on trust deed loans in January 2010 rose 9.5% on a daily average basis from December 2009, according to Foreclosure Radar reporting. January 2010 had 19 recording days, compared with the 22 recording days in December 2009. A daily average basis tracks the number of foreclosures filed during the month divided by actual days on which documents could be recorded.

The increase in the number of NODs recorded in January 2010 is up more than 16% from January 2009. However, real estate owned (REO) properties are down more than 33% January over January, indicating that banks are taking longer to complete the foreclosure process.  [For more information on the NOD/NOTS statistics, see the December 2009 Market Chart, NODs and Trustee’s Deeds: Grim signs of real estate’s present condition.]

In January 2010, an average of 229 days passed between the NOD recording date to the trustee’s sale, about 3% longer than in December 2009, and over 19% longer than the same period one year ago.

REOs, once placed on the market, continue to sell rapidly.

first tuesday take: The bright spot is that brokers with REO properties to sell are seeing them go quickly. Unfortunately, such listings are fewer and further between, especially in light of the still-growing number of defaults and eventual foreclosures. Part of this can be attributable to lenders taking other steps to ward off foreclosures (extend-and-pretend modifications, etc.), but brokers and agents in the know are aware that these are only delaying the inevitable foreclosures.  After all, what other outcome could there be…?

Lenders continue to play the delay game to benefit their bottom lines as they do not report the market value of their loan portfolio of toxic mortgages (which is 94% of the home’s value, not the principal balance owed on the mortgage) until the REO property is resold. Thus, look for more of the same kinds of numbers next month, barring an abrupt 180 from the powers-that-be on modifications and loan balance cramdown authority for bankruptcy judges to clear up the insolvency of California’s 2,500,000 insolvent homeowners – the only common ground for a real estate recovery from this crisis.

Re: “January 2010 CA Foreclosure Report” from Foreclosure Radar