DataQuick: California foreclosures 'a logistical nightmare'
California notices of default resurged in the third quarter, and analytics firm DataQuick said the foreclosure process has become a mess in the state. Lenders paused foreclosure procedures in many states when questionable servicing practices arose in the third quarter of 2010. In California, notices of default — the first step in the foreclosure process — slowed to roughly 68,239 in the first quarter. But in the third quarter, lenders began restarting the process, boosting notices of default to more than 71,000, according to DataQuick. Still, the total is nearly half of the peak in the first quarter of 2009 when there were more than 135,000 notices of default filed in the state. "Figuring out what’s actually going on when it comes to foreclosures can be a logistical nightmare," said DataQuick President John Walsh. "In each case there are at least six or seven different legal entities contending with each other, each with a different agenda and timeline: The original lender, the homeowner, the current owner or owners of the loan, the servicing institution, the outfit doing the actual foreclosing, and the county recorder's office." Default filings are expected to run higher through the rest of 2011 than at the start of the year. "Obviously, some lenders and loan servicers have begun to plow through their backlogs of delinquent loans more aggressively," Walsh said, referring to earlier reports that Bank of America (BAC) in particular began moving quicker than other banks in recent months. DataQuick said The Bank of New York Mellon (BK), JPMorgan Chase (JPM) and Wells Fargo (WFC) were also speeding up the process. The median origination date for loans that defaulted in the third quarter once again was the third quarter of 2006, which has been the case for nearly three years. Write to Jon Prior. Follow him on Twitter @JonAPrior.