San Diego foreclosures fall in February

Written by Lily Leung

Link to article: http://www.utsandiego.com/news/2012/mar/28/san-diego-foreclosures-fall-feb/

The number of San Diego County homes that were foreclosed upon in February fell to its lowest level in more than four years, while mortgage defaults remain higher than the pre-recession norm, Wednesday's DataQuick report shows.

The county recorded 634 foreclosures in February, the lowest it's been since November 2007. The latest tally of foreclosures is 12.7 percent lower than in January and 29.2 percent lower than a year ago. Foreclosures peaked at 2,004 in July 2008.

Notices of default -- the first formal step in the foreclosure process -- totaled 1,278, down 9.2 percent from January and down 6.9 percent from a year ago. Mortgage defaults peaked at 3,832 in March 2009.

Monthly and year-over-year changes in both indicators are constantly volatile because they're heavily dependent on lender activity.

By comparing current foreclosure and mortgage-default figures to 1-year to 5-year averages, we can see decreases across the board.

It's important to note not all homeowners who receive notices of default, again, the first step in a foreclosure, will be foreclosed upon.

The percentage of California homeowners who start the foreclosure process and avert foreclosure is roughly 57 percent, based on data for the past five years from RealtyTrac. Homeowners can turn to other options from short sales to loan modifications.

Here's another analysis: DataQuick analyst Andrew LePage looked at San Diego County default notices in the second quarter of 2010 and figured out which percentage had ended up being a foreclosure or was resold.

What he found:

•41 percent had been foreclosed upon

•21 percent were not foreclosed upon and were sold on the open market.

•38 percent's status to be unclear. Among the explanations: these homes may be in the process of being foreclosed upon or the mortgage default was resolved.

"Big caveat is, you don’t know the exact status of the properties that got (default notices,) but for which we have no subsequent filings," LePage said. "Was it cured? Is it in a temporary loan mod? On the market as a short sale? Just in limbo, still, with the outcome uncertain?"