More San Diego Pre Foreclosures Not Pursued by Lenders- By: John Cutts
More San Diego pre foreclosures are not being completed by lenders, based on data from a research firm.
For the second consecutive month in February, the numbers of delinquency notices and foreclosure sale notices did not match up, in contrast to the typical occurrence where defaults and actual foreclosures follow the same trend.
In February, the number of delinquency notices soared to 2,166, the highest number reached since October last year and up from the 1,741 posted in January. However, the number of foreclosure sale notices dropped sharply by 21 percent to 973, compared to actual foreclosures in February 2009.
Actual foreclosures in February this year also marked a decrease from the 986 foreclosure deeds in January and from the 1,515 posted for foreclosure sale in December last year.
Analysts explained that the number of San Diego foreclosures dropped despite the surge in mortgage delinquency rates because more lenders allowed borrowers to work out loan modifications or negotiate short sales acceptable to them.
In contrast, the number of San Diego pre foreclosures continued to jump up because more homeowners could no longer sustain their monthly payments. Also, while many delinquent homeowners have really suffered financial reverses and job losses, a number of borrowers have decided to intentionally default because of sharp losses in their home values.
Strategic defaulters in San Diego figured that they cannot continue wiping out their retirement funds and savings to pay for houses that are priced like those properties sold at homes auctions in San Diego.
Compared to February 2009 levels, the number of delinquency notices in February this year was lower by 37.6 percent, but the high default count in 2009 was a result of deferred notification actions in 2008. Lenders were pressured by federal and state officials in 2008 to delay their foreclosure actions through various moratoria schemes. Record numbers of delinquency notices were filed in 2009 when the moratoria schemes ended.
Among neighborhoods in the San Diego County, Borrego Springs posted the biggest increase in delinquency notices year-over-year, which is 200 percent while San Ysidro posted the highest foreclosure rate at five filings per 1,000 households. Point Loma and Coronado posted the lowest number of foreclosures among communities with at least one filing.
More San Diego pre foreclosures are expected to be remedied in the coming months if other banks follow the example of Bank of America, which had decided to reduce the principal balances of distressed borrowers.
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