For the first time in California's history, foreclosure sales exceeded 1,000 properties per day in April, according to a report released Tuesday afternoon. Foreclosure sales at auction -- the last step in the foreclosure process -- jumped 44 percent in April to 22,838 sales, representing $9.45 billion in combined loan value, according to foreclosure data firm ForeclosureRadar
The vast majority of properties sold at auction received no third party bids, despite ever-increasing discounts from lenders anxious to prevent further build-up in REO inventories.
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Average discounts at auction hit 25 percent in April, ForeclosureRadar said, but nearly half of all properties taken to foreclosure sale even offered discounts of 30 percent or more from the current loan balance. The majority of these loans were 80 percent LTV first mortgages, making discounts of 40 to 50 percent from the prior sales price common in many parts of the state -- and yet, almost nobody bid on the properties, forcing lenders to add to their already bloated REO books.
The largest discounts offered in major Southern California counties were in luxe Santa Barbara, where properties auctioned off at a 29 percent discount, and Riverside, where the discount averaged 28 percent for the month. Even Orange County -- home to such glitzy locales as Newport Beach and Laguna Beach -- saw lender bids at foreclosure sales average 21 percent less than the amount originally owed.
"We expected a significant increase in auction sales based on previous default patterns," said Sean O'Toole, founder of ForeclosureRadar. "Unfortunately, the continued increases in defaults tell us that the worst is still ahead.
"It is time for lenders to accept this reality, and start approving short sales rather than forcing more than two-thirds of troubled homeowners through the entire foreclosure process."
New borrower defaults, referenced by filings of Notices of Default, increased slightly from March's numbers to set another new record high, reaching 44,101 new filings during April. Notices of Trustees Sale, issued approximately 3 months following a Notice of Default, jumped 7.8 percent in April -- surpassing the previous record with a total of 29,892 new filings.
Lenders added 22,324 properties to their real estate owned inventory in April, ForeclosureRadar said, and are increasing REO on their books an average of 1.36 times faster than they can sell the properties in inventory, O'Toole said.
Amazingly, and in a sign that foreclosures are spreading to every part of the state, foreclosure sales nearly doubled in both Marin County -- a 96 percent increase -- and Orange County, up 82 percent in just one month alone
. Orange County posted 1,133 foreclosure auctions during April.
For more information, visit http://www.foreclosureradar.com