2011 Foreclosure Activity Ends With a Whimper
Foreclosure Starts dropped significantly throughout our coverage area with the exception of a modest increase in Oregon. Foreclosure Sales were mixed, and down far less than we expected given lender announcements of holiday moratoriums. California and Washington actually saw modest increases. Also surprising was a drop in the time to foreclose across most states, since foreclosures typically get extended over the holidays.
An event of particular note this month was an unexpected spike in the Cancellations of foreclosure in California, with an increase of 45.8 percent from the prior month. Almost the entire increase occurred in Los Angeles County where over 5,000 sales were cancelled. This looks to have been caused by a city ordinance eliminating the trustee sale location in Norwalk. We expect many of the cancelled sale dates to be reissued at a new location within the county soon.
Nevada’s new foreclosure law, which caused Foreclosure Starts to plummet in October, are now impacting Foreclosure Sales as well. We’ve seen foreclosure activity bounce back after lenders deal with state law changes in the past, but its less clear that we’ll see such a recovery in Nevada anytime soon.
“Nevada’s new foreclosure rules appear on track to bring a near complete halt to foreclosures in that state.” stated Sean O’Toole, Founder and CEO of ForeclosureRadar. “In the near term this will certainly help homeowners who were facing foreclosure, eviction, and potentially deficiency judgements. Longer term, we believe there will be unintended consequences for the state as business declines for the many real estate related companies that would normally service, resell and finance those foreclosures. While we hope the rules will lead to better lender accountability as intended, we fear that they will instead lead to higher unemployment and less certainty as to when the cloud of ‘shadow’ inventory hanging over the state will be lifted.”