Mortgage defaults in the Golden State dropped 24.3 percent in the fourth quarter compared to a quarter earlier, but were still 12.4 percent higher than a year ago, according to DataQuick.
A total of 84,568 Notices of Default (the first step in the foreclosure process) were recorded between October and December, compared to 111,689 in the prior quarter and 75,230 in the fourth quarter of 2008.
On primary mortgages, California homeowners were a median five months behind on payments when the lender filed the NOD, owing a median $13,510 on a median $325,818 loan amount.
The company said the drop in defaults may be the result of shifting market conditions and/or changing foreclosure policies among mortgage lenders and loan servicers.
In other words, it’s not necessarily a sign of a housing recovery.
“Clearly, many lenders and servicers have concluded that the traditional foreclosure process isn’t necessarily the best way to process market distress, and that losses may be mitigated with so-called short sales or when loan terms are renegotiated with homeowners,” said John Walsh, DataQuick president, in a release.
NODs hit an all-time high of 135,431 in the first quarter of 2009; the low in recent years was 12,417 in the third quarter of 2004, when annual home price appreciation was around 20 percent.
Countrywide (5,588) originated the most loans that went into default last quarter, followed by Wells Fargo (3,482) and Washington Mutual (3,460).
Trustees Deeds recorded, which reflect the number of homes or condos actually lost to foreclosure, totaled 51,060 in the fourth quarter, up 2.1 percent from the prior quarter and 10.6 percent from the fourth quarter of 2008.
The good news, I suppose, is that 84.8 percent of the 328,310 homes foreclosed on statewide in the 18-month period ending last September had been re-sold by the end of 2009.
A year prior, the comparable number was just 66 percent, so at least they’re not adding as much to the inventory glut.