Californians entering foreclosure Up 19%

Inquiring minds are watching next year come into view now as the number of Californian’s entering foreclosure rises 19 percent in the fourth quarter:

Fresh data show the number of California homes entering foreclosure jumped nearly 19% in the third quarter from the previous quarter, the first time the Golden State has logged an increase in the key measure since hitting a peak early last year.

It is too soon to tell whether the increase represents a further deterioration in homeowners’ ability to pay their mortgages or just improved efficiency on the part of lenders, analysts said. Big banks were overwhelmed in 2009 by the sheer number of delinquent borrowers and efforts to work with troubled homeowners, and the lenders could be playing catch-up, analysts said.

A total of 83,261 default notices were filed against California properties in the third quarter, the first formal step in the foreclosure process. Despite the uptick from the second quarter, the number was still down 25.5% from the same period last year and 38.5% off the peak reached in the first quarter of 2009, according to statistics released Tuesday by San Diego research firm MDA DataQuick.

The grim statistics just tell a story of how many broken families’ dreams there have been:

Foreclosures accounted for 35.5% of the state’s resale market in the third quarter, down from 35.8% the previous quarter and 42.7% in the year-earlier quarter. A healthy chunk of demand for foreclosed homes is coming from investors. At formal foreclosure auctions statewide last quarter, 22.7% of foreclosed homes were bought by investors, DataQuick said.

“There is still a lot of investor money out there,” said Leo Nordine, a Los Angeles real estate agent who sells foreclosure properties on behalf of several major lenders. “It’s a funny economy: The regular people seem totally broke, but there is a lot of investor cash out there.”

He said banks were trying to sell foreclosed properties to people who will actually live in them. Bank of America and Wells Fargo, as well as mortgage titans Fannie Mae and Freddie Mac, have instituted policies that allow offers from people who will live in the homes to trump offers from investors, he said.

“There are too many investors and not enough real people,” Nordine said.

Too many investors? Let’s see if next year this is still there major complaint.


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