Mortgage Defaults in Calif. Drop in Q210 to Lowest Level in 3 Years
Lenders issued 70,051 notices of default (NODs) on California homes in Q210, down 43.8% from the second quarter of last year to the lowest level seen since 2007, according to the San Diego-based real estate research firm, MDA DataQuick. The Q110 level was the lowest since Q207 when 53,943 NODs were filed in the state. The peak came in Q109 when lenders filed 135,431 NODs. The movement of defaults from the lower-cost markets to the more expensive neighborhoods is slowing. The most affordable ZIP codes represented 40.1% of all default activity in Q210, nearly level with the 40.9% share reported in the previous quarter. In more expensive ZIP codes, where the median sales prices was more than $800,000, defaults fell 11.3% from the previous quarter and 30.4% from a year ago. “Obviously, motivated sellers and accommodating lenders have played a part in bringing the default filings down, especially when it comes to short sales. Public policy has also been a factor. We also need to remember that prices have come up off bottom over the past year. If they continue to rise, fewer homeowners will find themselves under water, which is a significant factor in letting a home go,” said John Walsh, president of DataQuick. There were 47,669 trustee deeds, or foreclosures, in California for Q210. It’s up 4.4% from the second quarter of 2009 and 11.2% from last year. The all-time peak reached 79,511 in the third quarter of 2008. Of all the homes foreclosed in the two years ending in March, 85.7% had been resold on the open market. A year ago, that figure was 83.5%. REO sales accounted for 36% of all California resale activity in Q210, down from 42.5% in the previous quarter. At its peak in Q109, REO made up 57.8% of all resales in the state. Write to Jon Prior.