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California reports confusing year on year trends

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By : John Smith    99 or more times read
Foreclosures are on the up in California, in fact in some Counties they’ve increased alarmingly compared to last year.

This is further proof that Federal efforts to keep Americans in their homes probably failed miserably during this time, although of course we don’t know what would have happened if Obama hadn’t intervened.

According to a foreclosure website, San Mateo County recorded 233 foreclosures in March 2010, up 80 year on year. The situation was far worse in Santa Clara County, which recorded a 72% jump to 434 from 235 over the same period.

Mark Skilling, Chief Operating Officer at a foreclosure website expects things to get worse in California before they get better. “The trend is up 92%,” he told me, “while March 2009 saw 10,040 foreclosures, 19,308 occurred in March this year.”

Part of the reason for this is that March last year was the month when many lenders voluntarily stalled foreclosure proceedings while awaiting HAMP. This program has not been as effective as hoped and has delivered far fewer loan modifications than originally expected, according to Paul Leonard at the Center for Responsible Lending’s Oakland office.

In March 2010 Obama’s administration rolled out an updated version of HAMP that included a re-financing plan for underwater borrowers, as well as incentives for obliging lenders. What’s not known is the impact this will have, and whether it will reverse, stall or just make a tiny dent on trends.

During March this year 398 San Mateo households received default notices from their lenders, which notices are the first steps in the foreclosure process. That’s up from 352 in February, but encouragingly better than the 578 in March 2009, Trends are similar in Santa Clara – a total of 1,082 which was up from 976 for the previous month but way down from the March 2009 figure of 1,714.

A positive sign is the improvement in foreclosed residential property sales. For the first time California repossession sales touched 4,000 which is a great improvement over the 1,094 similar sales recorded in March 2009. Both San Mateo and Santa Clara posted 37 of these, both of which were around 40% up on the previous year.

“Maybe people are thinking we’ve bottomed out,” muses President of San Jose Real Estate Investors Association Geraldine Barry. “Let’s hope it’s not a false bottom though.

“People will always buy when prices are discounted and the interest rate is low – the economic drivers in this area make real estate investment a sensible long-term strategy regardless of short term trends.”
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