The following data comes from www.ForeclosureListService.com.

The last several months of 2011 saw a slow down in new foreclosure filings, but not because things were getting better. Lenders were trying to clean up the “robo signing” mess, even though California’s foreclosures weren’t directly involved in that scandal.

Some states (like Florida) are judicial foreclosure states, meaning every foreclosure must be done through the court, whereas California’s foreclosure process is done through a defined process established by statute.

Some believe the rate of foreclosures may pick up in 2012. However, this week a coalition of state Attorney Generals are close to a deal with the nation’s largest lenders to provide mortgage relief (loan mods with principle reductions) which may slow down the number of foreclosures – and boost the values of real estate.

Here’s the data:

Monthly graph – last 12 months

Quarterly graph since 2006 ending Q4 2011

The following data comes from www.ForeclosureListService.com.

We are definitely seeing a surge in the filing of new foreclosures in Ventura County. The first step in California’s foreclosure process is the filing of the Notice of Default. That period lasts 3 months, then the trustee/lender files the Notice of Trustee Sale document which gives the time, place and amount of bid for the property. If the property goes to auction, a Trustee Deed is recorded showing the new owner. It can either be the lender (if no third party bid for it) or the successful high third party bidder.

Foreclosure_statistics_monthly_october-2011

Foreclosure_statistics_quarterly_sept-no_line-2011

The number of filings of Notice of Defaults for September (first step in the foreclosure process) continued a second month of decline from August even though the quarterly graph shows a turn upward.

The spread between the blue line and the green line always intrigues me. The green line represents completed foreclosures – over 200 homes a month.

I just don’t understand why homeowners – who know they can’t afford to keep their home – allow their lender to foreclose when they could be in control of the process and do a US Treasury HAFA short sale – and get $3,000 at close of escrow!

• 12 month graph

• Quarterly graph ending in Q3

The trend line for Ventura County Notice of Defaults (first stage of a foreclosure) had seen a gentle decrease over the past 12 months until August, when the numbers dramatically shot up.

Specifically, July saw 401 Notice of Defaults but August recorded 678, an almost 70% increase. It takes a minimum of 3 months before a Notice of Trustee Sale can be recorded, and another 21 days before the auction can be set, so we won’t see a spike in REO properties until at least the end of the year.

Also, we’ve seen a lot of properties where the lender sets an auction date, but delays the sale month to month for many months. Shadow inventory issues??

Whatever the reason, it would appear lenders are rapidly stepping up their foreclosures in the County.

Many thanks to www.ForeclosureListService.com for the info…

On Thursday, at 11:00 a.m., a couple lost their home at a foreclosure auction at the entrance to the Hall of Justice in Ventura. It was bought by a third party investor.

While this happens every day in Ventura County, this particular case is poignant to me because it didn’t have to end this way. This couple had been trying to do a loan mod. But as many of you know, the so-called “dual track” process can be running simultaneously while the homeowner tries to get their loan mod.

Several months ago Don had spoken to this couple about the possibility of doing a HAFA short sale (the US Treasury’s ‘graceful exit’ program for distressed/under-water owners). It was apparent to us their financial situation was dire, but they insisted they were working with their lender on a loan mod.

Last Friday, when their auction was finally set, Don and I spoke to them again about their time running out. The husband stated he was told by their lender that he was going to get a decision on their loan mod by “next Friday” (the 8th). But we said, the auction is set for next Thursday!

They listened to us, but we sensed either a stubbornness, or perhaps indecision, about what they were going to do. They genuinely (I think) thought everything was going to “work out” okay.

I’ve written and counseled that distressed homeowners have to go through the so-called 5 stages of grief (denial, anger, bargaining, depression, acceptance) before they can deal with the financial decisions of their home. Many homeowners are stuck in denial and anger and never get to the point where they can make the best financial decisions for their family.

So it saddened me knowing that a stranger was going to knock on this couple’s door and say he was now the new owner of their home.

Yesterday the US Treasury stated Bank of America, Wells Fargo and JP Morgan Chase were not fulfilling the goals of the Making Home Affordable program (using taxpayer TARP money) and as needing “substantial improvement” in handling the flood of requests for loan modifications. Because of these shortcomings, the US Treasury is withholding financial incentive payments that were designed to encourage the large banks to aggressively tackle underwater loans through loan mods or HAFA short sales.

Well duh – any Realtor working in the trenches can share their horror stories about interminable delays, lost paperwork and multiple submissions of paperwork that has plagued the real estate business because of these issues! Despite all the talk bank leaders tell Congress that they’re “doing everything possible” to handle the tsunami of short sales and loan mods, it’s obvious they’re not doing enough to staff up their resources to handle these issues.

In April the number of Notice of Defaults (NODs) was on par (low 400s) with the number of Notice of Trustee Sales (NTSs) – i.e., properties that are going to sale. For May, there was little change in the number of NODs but the number of NTSs jumped by 127 to the mid 500s. The number of Trustee Deeds (REOs) is creeping up. See the details on this chart.

Data is from Foreclosure List Service with permission.

Back in the early 90s, the number of Notice of  Defaults (NODs) were about twice that of the Notice of Trustee’s Sales (NTSs) and the Trustee’s Deeds were 1/3 to 1/2 of that. That pattern went on for years but now we’re seeing a shift. The NODs are down, most NODs go to a sale date and 50 – 70% either go back to the lender or are bought by an investor at the auction.

Currently, the number of NODs for April (410) is way down from March (546) but is the same as February.

Check out the chart for the last 12 months here.

Recently I met with an individual who was concerned about the tax implications between a foreclosure vs. doing a short sale – and the potential of having to pay taxes on the short sale. I believe this individual felt there would be no (or maybe less) tax implications if the property were simply to go through the foreclosure process.

The first thing I said was I’m not a tax attorney or CPA so I can’t give tax advice, and all tax implications must be discussed with your tax adviser. But having said that, here are the general federal and California rules, forms, etc, pertaining to this issue. Read the rest of this article »

The closely divided Senate Banking and Financial Institutions committee voted 3-3 yesterday afternoon. Because of the tie, the bill failed to pass.

Proponents of the measure argue on a micro scale for the individual homeowner who is deeply underwater, maybe trying to get a loan mod and/or is facing foreclosure. Opponents of the measure argue on a macro scale that the measure merely delays the inevitable cleansing of financially weak homeowners who can’t afford their homes, thus delaying an increasingly stubborn housing recovery.

As usual, there is merit in both positions.But for now, it would appear the current process of dual-track will continue.