In California, “Back to the Bene” At Record Levels

Lenders — called the “bene” by foreclosure auctioneers, short for beneficiary — took back California foreclosures into inventory at a record pace in May, to the tune of $10.4 billion. According to foreclosure tracking firm ForeclosureRadar, the May total represents the first time incoming REO in California has exceeded $10 billion in a single month, and came despite a noticeable pickup in investor purchases at auction. Foreclosure sales at auction rose 11.8 percent to a total of 25,523 properties, Foreclosure Radar reported; of those, 24,831 received no bids beyond the lender’s opening bid — meaning REO inventories continued to rise for many of the nation’s larger lenders and servicers during May. Despite continuing growth in REO, the report noted a 34.6 percent increase in California properties purchased by third parties. The jump in investor activity coincided with a National Association of Realtors report this week that found pending home sales jumped 6.3 percent during April; sources suggested to HW that the NAR report was capturing REO investor activity, a sentiment ForeclosureRadar’s data would seem to support to some degree. “The increase in investor purchases at foreclosure auction is a welcome change,” said Sean O’Toole, founder of ForeclosureRadar. “For too long lenders were unrealistic about opening bids at auction. They finally seem to realize the magnitude of the problem and are beginning to discount accordingly.” Lenders discounted 86 percent of all foreclosures taken to sale with an average discount of 28 percent. The Northern California Counties of Sacramento, San Joaquin, Stanislaus and Merced saw the largest average opening bid discounts ranging from 31 to 37 percent. In Southern California, Riverside saw the largest discounts, with an average of 27.5 percent, followed by San Bernardino at 25 percent. Looking ahead, filings of Notices of Default dropped 2.5 percent to 43,011 in May — but normalized against the number of days in the month, daily average filings actually increased 2.4 percent from April’s daily average, ForeclosureRadar noted. Notices of Trustee Sale — typically issued three months after the NOD, and a sign of imminent foreclosure — increase 15.6 percent to a new record of 34,564. Taken together, increasing NOD and NTS activity would seem to signal continued high foreclosures to come across much of the Golden State in the months ahead, O’Toole said. For more information, visit

Most Popular Articles

3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please