Even as defaults and foreclosure sales fell in April, lenders kept the pressure on borrowers by pushing delinquent borrowers through the foreclosure process, data from analyst ForeclosureRadar showed Tuesday.
After a record-setting number of defaults and foreclosures in 2009, the number of both in North San Diego and Southwest Riverside counties have been on the wane. But while defaults and foreclosure auctions represent the beginning and end of the foreclosure process in California, the middle step, called a “notice of auction,” has been more heavily used in recent months, especially by Bank of America.
In April in North County, 870 borrowers received notices of default, down 2.8 percent from March and 37 percent from April 2009. Lenders sold 133 homes at foreclosure auction, down 47 percent from March and 70 percent from April of last year.
Southwest County saw similar trends, as 853 borrowers defaulted, down 9.7 percent from March and 36 percent from April 2009. Lenders auctioned off 190 homes in April, down 60 percent from March and 70 percent from April 2009.
“Banks are trying to modify loans a lot because of pressure from the administration (of President Barack Obama), or short-sale them,” said Leonard Baron, a professor of real estate at San Diego State University. “It’s a lot less costly.”
Overall, homeowners appear to be making headway against the fundamental problem of properties worth less than the amount on them, according to data from market analyst CoreLogic.
Added all together, borrowers from San Bernardino and Riverside counties are cumulatively underwater: The total value of properties, at $199 billion, was worth $5.6 billion less than the total debt on those properties at the end of March —- an improvement from the $8.3 billion in negative equity at the end of December. San Diego County home owners had $73 billion more in property value than they had in total debt at the end of March, up slightly from $72.2 billion at the end of 2009.
But homeowners already in default found themselves pushed further through the foreclosure process, as lenders sent out 1,438 notices of auction in the North San Diego and Southwest Riverside counties, up 27 percent from March and more than double the number sent the previous April.
Those notices alert homeowners already in behind on their payments that their homes could be sold at foreclosure auction in as little as three weeks. Much of the increase was driven by Bank of America, whose foreclosure division ReconTrust N.A. sent out 39 percent of the notices across the region.
The rise in notices of auction doesn’t mean lenders are about to foreclose, just that they’re keeping their bases covered, Baron said.
“It’s a precaution,” he said. “It’s giving them the ability to foreclose if they need to.”
article byEric Wolff
