A real estate information service reports California mortgage defaults hit a three-year low in the second quarter of this year, but foreclosures appeared to be on the rise statewide. The Bay Area, as whole, and Santa Clara County, in particular, appear to have taken less of a hit this period.
MDA DataQuick reports a total of 70,051 Notices of Default were filed at county recorder offices during the April-to-June period, down 13.6 percent from the prior quarter, and down 43.8 percent from the second quarter of 2009. Last quarter's total was the lowest since second quarter of 2007, when 53,943 NODs were recorded. The peak was in the first quarter of 2009, when 135,431 homeowners received foreclosure notices.
"Obviously, motivated sellers and accommodating lenders have played a part in bringing the default filings down, especially when it comes to short sales," said John Walsh, DataQuick president.
The same report states the number of Trustees Deeds recorded, which reflect the number of houses or condo units lost to the foreclosure process, totaled 47,669 during the second quarter, up 11.2 percent from 42,857 for the prior quarter, and up 4.4 percent from the second quarter of 2009. The all-time peak was 79,511 in the third quarter of 2008.
In the Bay Area, notices of default were down 38.8 percent. Among the nine counties in the region, NODs filed were down most in Santa Clara County, which saw 2,313 NODs filed in the second quarter of 2010, a drop of 43.60 percent from the same period a year ago.
In the period between April and June of this year, there were 6,797 homes lost to foreclosure in the Bay Area, down 1.9 percent from the same period last year. Compared to the other nine counties in the region, Santa Clara County lost fewer homes to foreclosure this period. In the second quarter, the county lost 1,081 homes and condo units to foreclosure, down 10.7 percent from 1,210 the second quarter of 2009. On the other hand, San Francisco County saw an increase of homes lost to foreclosure compared to the same period the prior year, up 32.4 percent, as did Marin County, 23.8 percent; Napa County, 17 percent; and San Mateo County, 16 percent.
"We are fortunate to see notices of default and foreclosure numbers down in our county," said Jeff Bell, president of the Silicon Valley Association of REALTORS®. "While there has been some increasing distress at the high-end for the past year, we don't believe there will be a large flood of distressed homes in the high-end as we've seen in the entry level market. It is just less likely when you look at the financial structure of purchases in the region. People buying in the Silicon Valley will typically have higher income and therefore, lower ratios for qualifying for loans and putting larger amounts down."
MDA DataQuick reports on average, homes foreclosed on last quarter took 9.1 months to wind their way through the formal foreclosure process, beginning with an NOD, up from 7.5 months for the prior quarter and 6.4 months a year ago. The increase could reflect, among other things, lender backlogs and extra time needed to pursue possible loan modifications and short sales.
Foreclosure resales accounted for 36 percent of all California resale activity last quarter, down from a revised 42.5 percent the prior quarter, and down from 49.9 percent a year ago. The peak was 57.8 percent in the first quarter of 2009. Foreclosure resales varied significantly by county last quarter, from 9.5 percent in San Francisco to 61.7 percent in Imperial.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
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