Banks are working with their clients in order to help prevent foreclosures. Over the past three months data from MDA DataQuick shows a 24.3% decrease in the amount of foreclosures or notices of default. Trustee sales did increase a little over 2%, the final stage of the foreclosure process for California.
The foreclosure process is not working out the way it used to. Lenders are negotiating with their clients who are in default in order for them to keep their homes through a process of short sale. Banks are losing money through the short sale process, but it is better than having multiple houses sit on the market for months. With short sales they are getting some type of profit, rather than foreclosing on the property.
The Obama administration has administered loan modification programs in order to make mortgages affordable for those homeowners who can no longer afford their mortgage due to a hardship. For the month of December a reported 172,288 trial modifications were administered, but only 7.8% were made permanent.
According to statistics, loans that were 120 days or more past due had increased to 4.7% from 4.51%. The government programs available have been able to save many homes and those who are defaulting are in the process of reaching a modification themselves. Hopefully, lenders will make the trial modifications permanent and put those in default on a trial plan before we have the market overflow with foreclosure listings.
A total of 84,568 notices of default were recorded at county recorders offices during the fourth quarter, an increase of 12.4% from the fourth quarter of 2008. Trustees deeds recorded, or the actual loss of a home to foreclosure, totaled 51,060 during the fourth quarter, up 10.6% from 46,183 for fourth-quarter 2008.
DataQuick reported the highest rates of default in mortgages in Merced, Stanislaus and Riverside counties. The areas with the least amount defaults are San Francisco, Marin and San Mateo.
Countrywide had a reported 5,588 defaulted loans, Wells Fargo had 3,482, Washington Mutual (CHASE) confirmed 3,460, Bank of America had 1,760 loans and World Savings with 1,869. All of these lenders had the most originated loans in 2006.
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