Wednesday, June 11, 2008

$10 Billion in Loans Go 'Back to the Bene' Investor Activity Increases at the Courthouse Steps

ForeclosureRadar (www.foreclosureradar.com), the only website that tracks every California foreclosure with daily auction updates, today issued its California Foreclosure Report. Lenders, technically called the beneficiary or "bene" by foreclosure auctioneers, took back $10.4 Billion in California loans as a result of foreclosure sales in May. Despite this record we saw a significant increase in investor purchases at auction.

Discovery Bay, CA (PRWEB) June 11, 2008 -- ForeclosureRadar (www.foreclosureradar.com), the only website that tracks every California foreclosure with daily auction updates, today issued its California Foreclosure Report. Lenders, technically called the beneficiary or "bene" by foreclosure auctioneers, took back $10.4 Billion in California loans as a result of foreclosure sales in May. Despite this record we saw a significant increase in investor purchases at auction.

May California Foreclosure Activity
May California Foreclosure Activity

High-level findings include:

  • Notices of Default, the first step in California's foreclosure process, were down 2.5% for the month totaling 43,011 new filings. Daily average filings were actually up 2.4% to 2,009 filings per day.
  • Notices of Trustee Sale can be issued 3 months following a Notice of Default and set the date, time and location of the foreclosure auction, increased 15.6 percent in May to a record 34,564 new filings.
  • Sales at auction increased 11.8% to a total of 25,523 properties. Of those 24,831 received no bid higher than the lenders opening bid and became lender owned (REO). The combined loan value at the time of foreclosure on this new REO inventory exceeded $10 Billion for the first time.
  • Despite more than 97% of foreclosed properties being returned to the lender, there was a notable 34.6% increase in properties purchased by third parties. We believe this third party bidding is due to a renewed investor interest as the lenders continue to increase discounts at auction.

"The increase in investor purchases at foreclosure auction is a welcome change." said Sean O'Toole, founder of ForeclosureRadar. "For too long lenders were unrealistic about opening bids at auction. They finally seem to realize the magnitude of the problem and are beginning to discount accordingly."

Lenders discounted 86 percent of all foreclosures taken to sale with an average discount of 28 percent. The Northern California Counties of Sacramento, San Joaquin, Stanislaus and Merced saw the largest average opening bid discounts ranging from 31 to 37 percent. In Southern California, Riverside saw the largest discounts, with an average of 27.5 percent, followed by San Bernardino at 25 percent.

At the county level we saw noticeable increases in foreclosure sales in both Riverside, which saw the highest level of foreclosures per capita in May, and San Bernardino which saw foreclosure sales increase by 22%. By total loan value, Southern California counties filled out the top five with Los Angeles having $1.83 Billion in loans foreclosed, Riverside $1.43B, San Bernardino $900k, San Diego $883K, and Orange at $695k. This is primarily due to the size of these counties - for example Los Angeles always has the highest foreclosure counts, yet ranks 33rd in our report when normalized for population.

See Graph of Statewide Trends

See Table of County Foreclosure Activity

California foreclosure report methodology
Rankings are based on population per foreclosure sale. NOD indicates the number of Notices of Default that were filed at the county, and NTS indicates filed Notices of Trustee Sale. Sales indicates the number of properties sold at foreclosure auction. Percentage changes are based on monthly Sales. The data presented by ForeclosureRadar is based on county records and individual sales results from daily foreclosure auctions throughout the state - not estimates or projections.

About ForeclosureRadar.com
ForeclosureRadar is the only web site that tracks every foreclosure in California with daily updates on all foreclosure auctions. ForeclosureRadar features unprecedented tools to search, manage, track and analyze preforeclosure, foreclosure auction, short sale and bank owned real estate. The web site was launched in May 2007 by Sean O'Toole, who spent 15 years building and launching software companies before entering the foreclosure business in 2002 where he has successfully bought and sold more than 150 foreclosure properties. ForeclosureRadar is an indispensable resource for real estate agents, brokers, investors, lenders, mortgage brokers, attorneys and other real estate professionals specializing in the California real estate market.

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