Notices of Foreclosed Home Auctions in Orange County Up in July
In July, a total of 2,591 notices of foreclosed home auctions were filed by lenders in Orange County, California. The total figures represented a 4 percent increase in the number of notices default from June and 17 percent compared with the same month the previous year.
Market data also showed that banks and mortgage loan providers filed notices of trustee’s sales totaling 2,166. Trustee’s sale notices served as warnings to homeowners that their properties are at risk of foreclosure auctions.
Last month’s figures were the highest total for 11 months. The numbers represented an increase of 35 percent from the previous month and 2 percent from July 2008. Industry analysts observed that the number of foreclosure auction notices was similar to last summer’s peak.
However, despite the surge in the number of notices for foreclosure auctions, figures for actual foreclosures remained marginal compared with figures last summer. In July, banks and mortgage loan servicers foreclosed on 782 homes and condominiums, a drop of 14 percent compared with June and 46 percent below compared with July the previous year.
Industry analysts cited several factors that pull down actual foreclosure numbers last month. Foremost of them are the federal government’s loan modification program and lenders’ reluctance to foreclose on properties because they do not want to overwhelm their portfolio with more bank foreclosure properties.
Some analysts said that lenders’ reluctance to start foreclosure action on distressed properties is part of their strategy to create an artificial lack of supply on the market. With many first-time homebuyers taking advantage of the $8,000 federal tax credit and the low property prices, the real estate market is now ripe for picking.
Lenders are aware of these and to drive up property prices, they have to limit the supply of foreclosure homes on the market. Low supply in a market with high demand boosts property prices.
Additionally, some borrowers are also delaying foreclosures by filing bankruptcies, filing lawsuits against banks or servicers or taking loan modifications and then re-defaulting.
Statewide, banks and mortgage loan servicers filed a total of 39,294 foreclosure auction notices in July, representing a 31.6 percent rise from the previous month and 0.7 percent higher compared with July of the previous year.
To top it all, the total number of outstanding foreclosure auction notices, not including those that have been sold or cancelled, increased to a record high of 124,874 in July.
