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Wednesday, February 29, 2012

Are foreclosures easing in San Diego County?

Both completed foreclosures and the number of San Diego property owners who started the foreclosure process increased in January from the end of 2011, but those numbers are down compared to figures from a year ago, real estate tracker DataQuick reported Tuesday.

San Diego County recorded 726 foreclosures in January, up 2.3 percent from December but down 24.3 percent from January 2011, the latest numbers show. The county's peak was 2,004 in July 2008.

The movement of foreclosures, which depend on the banks, have long been erratic. But by analyzing the average number of foreclosures in certain time increments, it appears that foreclosures may be easing. (Please refer to the first table.)

The same thing may be happening with notices of defaults, the document that signals the start of a foreclosure. (Please refer to the second table.)

There were 1,407 default filings in January, up 13 percent from December but down 9.1 percent from January 2011. The county is about 63 percent below its default-notice peak of 3,832 in March 2009.

DataQuick analyst Andrew LePage said the short- to mid-term view of the distressed market in San Diego is "cloudy."

The long-term picture, however, "continues to brighten slowly" alongside slight job growth and fewer mortgage delinquencies.

Another new factor in the world of foreclosures is a recently announced settlement involving 49 state attorneys general and the country's Top 5 banks over questionable foreclosure practices, LePage added.

The $25 billion mortgage settlement, which still needs judge approval, could help about 466,000 Californians by reducing principal balances, refinancing mortgages and offering restitution in cash.

Halt to Fannie, Fredie Foreclosures Sought

From the San Diego Union Tribune February 29,2012

California Attorney General Kamala Harris has asked the regulator of mortgage giants Fannie Mae and Freddie Mac to stop foreclosure sales in the state until it reviews whether principal reductions could help homeowners with Fannie- and Freddie-backed mortgages.

Harris made the request to Federal Housing Finance Agency Director Edward DeMarco in a Feb. 24 letter, roughly two weeks after Harris announced her involvement in a historic mortgage settlement between 49 attorneys general and the nation's largest lenders.

The settlement, which still needs judge approval, could help an estimated 466,000 borrowers in California. However, loans backed by Fannie Mae and Freddie Mac would not be affected by the attorney generals' mortgage deal.

"You have consistently declined to authorize principal reduction programs by those government-sponsored enterprises," said Harris in the letter to DeMarco.

Harris' office estimates more than 60 percent of home loans in the state are owned or held by Fannie and Freddie, a significant portion of borrowers who could benefit from having their principal balances reduced.

The Federal Housing Finance Agency could not immediately be reached for comment.

DeMarco, during an oversight committee hearing hearing on Nov. 16, said the FHFA has concluded that reducing principal balances is "not going to be the least-cost approach for the taxpayer" when compared to other alternative-foreclosure programs including principal forbearance, which "zeroes out the interest rate charged on the underwater portion of the mortgage."