Foreclosures are down and things are rosy again in California

Highland Clearance

Highland Clearance

RealtyTrac’s out with its January foreclosure numbers and there are sure to be some happy bulls out there cheering the results. Cal me Eeyore – my family does – but I see little to cheer about.

IRVINE, Calif. – Feb. 14, 2013 — RealtyTrac® (www.realtytrac.com), the leading online marketplace for foreclosure properties and real estate data, today released its U.S. Foreclosure Market Report™ for January 2013, which shows foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 150,864 U.S. properties in January, a decrease of 7 percent from the previous month and down 28 percent from January 2012. The report also shows one in every 869 U.S. housing units with a foreclosure filing during the month

“The U.S. foreclosure landscape in January was profoundly altered by the effects of new legislation that took effect in California on the first of the year,” said Daren Blomquist, vice president at RealtyTrac. …. As a result, the downward foreclosure trend in California accelerated into hyper speed in January, decisively shifting the balance of power when it comes to the nation’s foreclosure activity.

“For the first time since January 2007 California did not have the most properties with foreclosure filings of any state. Instead that dubious distinction went to Florida, where January foreclosure activity increased on an annual basis for the 11th time in the last 13 months.”

  • Some of the biggest year-over-year increases in foreclosure starts came in non-judicial foreclosure states where legislation or court rulings stalled foreclosure actions last year: Arkansas (539 percent increase), Washington (179 percent increase), and Nevada (87 percent increase). 

California has put a stick in the spokes of the foreclosure bicycle and that will certainly work, for now, but long term it merely postpones the inevitable. Or at least I hope that’s all it will do. Here in Connecticut our legislature and courts have combined to push foreclosures to an infinite horizon and defaulting homeowners have noticed. Just yesterday I inquired of another agent whether he knew anything about a house that had popped up as a pending foreclosure ($1.8 million mortgage) and was told that, approached with a short sale deal three years ago the owner declined because he preferred, I was told, the “stay and don’t pay” plan. Three years on, that looks like a pretty smart move on his part and I don’t fault him, but long term, if it’s impossible to foreclose on a defaulting loan in Connecticut, I’d think that mortgage interest rates will have to go higher to reflect the increased risk.

Or not – I keep waiting for Obama to issue an Ollie Ollie in come free call and reset all consumer debt to zero. You can do that sort of thing when you own a printing press.

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One response to “Foreclosures are down and things are rosy again in California

  1. Atticus

    Housing Industry Hopes Obama Line Will Soften Mortgage Rule

    http://www.bloomberg.com/news/2013-02-13/housing-industry-pins-hopes-on-obama-to-soften-down-payment-rule.html

    Makes you wonder how real the “recovery” is. It’s pretty clear w/o government intervention real estate will resume its correction.