Notice of Defaults (NODs) recorded in June 2010 totaled 25,790. This is a mixed result due to:
- a 7% increase from May 2010 (24,162); and
- a 45% drop from June one year earlier (47,093). [For more information concerning NOD volume in California, see the May 2010 first tuesday article, Decrease in NODS and NOTS May Not be a Lasting Trend.]
Notice of Trustee Sales (NOTS) recorded in June 2010 totaled 34,261. This upward trend is:
- a 22% increase from May 2010 (28,098); and
- § a 12% increase from June one year earlier (30,711). [For more information concerning NOTS volume in California, see the May 2010 first tuesday article, Decrease in NODS and NOTS May Not be a Lasting Trend.]
After being down across the board in May, foreclosure activity is without a trend in the month of June. The mixed results are likely due to the skyrocketing foreclosure cancellations, which have risen to an all time record of 21,962 in June. Another culprit is failing loan modifications. The number of cancelled foreclosure sales is up 27% from May, and up 153% from June 2009. [For more information regarding rising foreclosure cancellations, see the April 2010 first tuesday article Continued Rise in Foreclosure Cancellations.]
first tuesday take: The increased number of cancelled foreclosure sales are mostly coming from a single source, JP Morgan Chase. This is largely due to Chase’s recent toxic mortgage-laden acquisitions (financed by the FDIC), including Washington Mutual.
Another possible cause for the increased number of cancelled foreclosures may be the various foreclosure alternative programs, such as the Home Affordable Modification Program (HAMP). . In an effort to stall foreclosure loss reporting, many lenders are offering alternatives under various “extend and pretend” programs. However, without a cramdown of the principal balance to the property’s current value, negative equity homeowners (currently a quarter of Californians) are still likely to end up in foreclosure.
Homeowners are beginning to realize that prices will not rise significantly for a decade or more. Even then, they will not likely have risen sufficiently to bring underwater homeowners to a 94% LTV condition, much less a sale which will produce net proceeds. [For more information regarding the HAMP, see the June 2010 first tuesday article, HAMP is losing participants.]
Re: “Record Number of Foreclosures Cancelled” from Foreclosure Radar