Foreclosure rates declined in Caifornia during February, according to a report released Wednesday afternoon by data service ForeclosureRadar.
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Foreclosure sales at auction declined 15 percent during the month to 16,931 sales, with a combined loan value of $6.85 billion.
Notices of Default, the first step in the foreclosure process, were also down 7.6 percent to 37,362 -- meaning less homes were lost to foreclosure, while fewer borrowers entered the foreclosure process in February. Activity for Notices of Trustee Sale, which serve as harbingers of imminent foreclosure sales, were also down 20 percent to 18,636.
Nonetheless, the overall numbers remain significantly higher than fourth quarter averages, ForeclosureRadar said. Defaults for the month were higher by 26 percent, and foreclosure sales higher by 36 percent, when compared to the three-month average recorded at the end of 2007.
"February declines are a welcome break from the astonishing increases in December and January," said Sean O’Toole, founder of ForeclosureRadar. "Unfortunately, those increases and the continued withdrawal of lending options point to more trouble ahead. Based on current activity levels, we still do not expect foreclosures to peak earlier than the third or fourth quarter of 2008."
Lenders continue to take back a substantial 98 percent of foreclosures at auction, despite offering substantial discounts, indicating that investor interest has all but disappeared and REO inventories have continued to grow at accelerated rates.
And that's despite some strong efforts to keep properties out of the REO bucket, even by lender standards. One year ago, opening bids were discounted 30 percent or more on just 3 percent of sales, ForeclosureRadar said. Today, a full 77 percent of sales are discounted an average of 19 percent, and a whopping 31 percent are discounted 30 percent or more.
For more informtion visit http://www.foreclosureradar.com