California default notices fall to 3-year low in second quarter
July 22, 2010
SAN DIEGO (AP) – Mortgage default notices for California homeowners have fallen to a three-year low after a fifth straight quarterly decline as conditions improved in more affordable, foreclosure-battered markets, a research firm reported Wednesday.
There were 70,051 default notices filed in California from April through June, down 43.8 percent from 124,562 during the same period last year and down 13.6 percent from 81,054 in the first quarter of 2010, according to MDA DataQuick.
It marks the lowest tally since the second quarter of 2007 and is down nearly 50 percent from the peak in the first quarter of 2009.
“We’ve been at such unusually high levels, it shouldn’t be too much of a surprise that we’re coming off of that,” said Andrew LePage, an MDA DataQuick analyst. “We’re not holding this up as proof that we’re coming out of the woods.”
As home prices rebound, fewer borrowers will owe more than their homes are worth, easing pressure on them to relinquish their properties, said John Walsh, the firm’s president.
Banks continue to turn more to short sales – when they agree to sell a property for less than the original mortgage amount – and are more willing to modify loans, MDA DataQuick said.
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Default notices are the first step in the formal foreclosure process.
The number of homes actually lost to foreclosure totaled 47,669 from April through June, up 4.4 percent from 45,667 in the same period last year and up 11.2 percent from 42,857 from January through March. The all-time peak was 79,511 in the third quarter of 2008.
Relatively affordable markets continued to suffer most. In ZIP codes with median home prices less than $300,000, there were 10.6 default notices filed for every 1,000 homes from April through June, while there were 2.9 notices for every 1,000 homes in areas with median prices greater than $800,000.
But the more affordable markets showed the biggest improvement. In ZIP codes with median home prices less than $300,000, default notices tumbled 46 percent from the second quarter of 2009, while areas with home prices above $800,000 only registered a 30 percent drop.