Thanks to last year’s voluntary foreclosure moratoria, this year California foreclosure numbers appear to be jumping right through the roof. California foreclosure sales in March 2010 increased 92.3 percent over March 2009, causing disbelief and some spikes in blood pressure as the media, the lenders and the public struggle to deal with the new numbers. Add in all the publicity about foreclosure alternatives, and the general sentiment is pretty negative on the west coast.
Sean O’Toole, founder and CEO of ForeclosureRadar, a California-based company that tracks foreclosures in California, sums it up gently by saying “The increase in foreclosure sales will likely come as a surprise to many given all the recent news about foreclosure alternatives like short sales, and new loan modifications with principal balance reductions. The simple reality is that these programs won’t help everyone and that foreclosures continue to be a very effective way of eliminating negative equity, even if it is the choice of last resort.”
O’Toole also emphasized that the increase in sales does not indicate an increase in the speed of foreclosures, but mainly reflects the lack of moratoria on the process. In fact, foreclosure timeframes have increased slightly and will likely continue to do so as there are now federally-mandated, additional steps to go through in most cases before the foreclosures can be filed and the transaction completed. Default filings in March 2010 actually dropped from March 2009, so just remember when you are reading the news that there may be a perfectly reasonable explanation for a skyrocketing number that the press either is not aware of, or may have chosen not to tell you.
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