The first three months of 2010 were an improvement over the same period in 2009 for home owners in California, according to statistics released on Tuesday by San Diego based research firm MDA DataQuick. These findings map to Federal efforts, aided to some extent by lenders, to assist troubled borrowers with loan modifications and permit short sales.
The picture is different elsewhere though: while distressed mortgages are still fairly common among low to medium low value borrowers, the problem appears to be spreading to parts of the Bay Area too.
That said, the number of notices of default were down for the first quarter of the year, throughout the entire State including Bay Area. There were 81,054 notices served throughout California (down 3,514 year on year) of which Bay Area contributed 1,367, or 77 less than the previous period.
John Walsh, DataQuick President is relatively upbeat. “We are seeing signs that the worst may be over in the hard-hit entry-level markets,” he said, “while at the same time problems are slowly spreading to more expensive neighborhoods. “We’re also seeing some lenders become more accommodating to workouts or short sales, while others appear to be getting stricter about delinquencies.”
Trustee Deeds, which form part of the early stages of foreclosure, were also on the improvement trail. During January to March 2010, 8,203 less were issued, again down from 2009 and this time by nearly 16%. The Bay followed suit with an improvement of nearly 1,000.
Is it possible that Obama’s $75 billion HAMP program is finally taking effect in the form of more affordable monthly payments as opposed to bank foreclosures? Are the banks finally coming to terms with impending changes that will embrace unemployed borrowers and put pressure on lenders to take the drive to reduce principal amounts more seriously?
Unfortunately the news is not equally good throughout California. San Francisco County, for example, recorded a 91% leap in trustee deeds between the two periods, although the affected homes numbered only 101 and 193 respectively.
“These numbers are small,” says San Francisco Realtor Eileen Bermingham, “given the volume of homes sold in a given year. There were 3,867 single-family homes and condos (not including new homes) sold in 2009, according to the San Francisco Multiple Listing Service, and I really don’t see the foreclosures bringing down overall values in the city much at all.”
According to DataQuick’s Andrew LePage the change may simply be the result of lenders clearing their backlogs. “The surge in actual foreclosures looks like it might be catch-up from notice of defaults that have been there for a while,” LePage told me.
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