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March 12, 2009 CALIFORNIA FORECLOSURE REPORT

rural_norcalCalifornia’s Average Negative Equity at Foreclosure Exceeds $200,000

Notices of Default and Properties Sold at Auction Continue to Rise in February

Discovery Bay, CA, March 12, 2009 ForeclosureRadar, the only website that tracks every California foreclosure with daily auction updates; today issued its California Foreclosure Report for February 2009. The average difference between current market value and outstanding loan amount exceeded $200,000 for properties sold at foreclosure auction in February. This represents a 189 percent increase in negative equity when compared to properties foreclosed on a year earlier. Notices of Default have increased 21.3 percent from January and have nearly returned to the peak levels reached in April 2008, despite the President’s Day holiday and February being a short month. Properties sold at foreclosure auction (trustee sales), rose 11.9 percent from January to 17,131.

High-level findings for February include:
  • Notices of Default, the first step in the foreclosure process, increased 21.3 percent over notices recorded in January. A total of 43,836 default filings represents a 17.3 percent increase from February 2008. Given the short month, the average daily number of Notices of Default recorded in February was up 27.6 percent from January.
  • Notices of Trustee Sale filed in February decreased 14.7 percent from January filings, with a moderate year over year increase of 2.2 percent from February 2008. With the current average delay of 125 days from the filing of a Notice of Default to filing the Notice of Trustee Sale, this drop follows the decline in Notices of Default seen late last year in response to Senate Bill 1137.
  • Auction sales for February increased 11.9 percent from January to February, to 17,131 sales, representing $7.2 Billion in loan value. While sales were up 1.2 percent year over year, they remain 41 percent below the peak reached in July 2008. Of the properties sold at auction, 92.8 percent went back to the lender, representing $6.65 Billion in loan value for the 15,904 properties.
  • Properties sold to third parties at auction continue to increase, rising 222.9 percent from the same time last year to a record 1,227 properties, a 38.8 percent increase from January.

“Despite their unpopularity, foreclosures and short sales are currently the only mechanisms working to eliminate the negative equity now plaguing 30 percent of Californians,” says Sean O’Toole, founder and CEO of ForeclosureRadar. “While prices have corrected to affordable levels in many parts of California, housing markets and the economy continue to suffer due to the unsustainable debt taken on during the housing bubble.”

The average property sold at auction in February of 2009 had $201,052 in negative equity, based upon an average value of $250,030, $422,349 in loans, and an additional $28,733 in negative amortization, interest and fees. A year earlier the average foreclosure had $69,529 in negative equity, based on a value of $378,578, loans totaling $423,111 and negative amortization interest and fees of $24,997. These averages likely underestimate negative equity as they exclude past due amounts and negative amortization on 2nd mortgages for which no Notice of Default has been filed.

Nearly 99 percent of the loans foreclosed on in February were originally made between 2004 and 2007, with 46 percent having been made in 2006 alone. On average, these properties were 3 bedrooms, 2 baths and 1,589 square feet, with more built in 2005 than any other year at 5.7 percent of February’s foreclosures.

Opening bids at auction were discounted an average of 36.3 percent from the outstanding loan balance, a decline of nearly 5 percent from the prior month. Still, the number of properties that were discounted by 50 percent or more increased to 6,307 of the 17,131 taken to auction. The largest discounts were found in Monterey, San Benito and San Joaquin counties, at over 46 percent, while San Francisco County continued to see the smallest discounts of any major county at 20 percent. “These deep auction discounts reflect the significant negative equity lenders and homeowners are facing, while also offering opportunities for knowledgeable investors,” offers O’Toole.

 

Februaray '09 California Foreclosure Report 

ForeclosureRadar Report by County
Rank Change
In
Rank
County NDF NTS Sales Population
Per Sale
% Change
Jan 2009
 % Change
Feb 2008
1 0 Merced 600 301 328 778 36% 10%
2 0 Riverside 5287 2458 2418 864 28% 16%
3 0 Stanislaus 1124 547 567 928 41% -2%
4 1 San Joaquin 1346 621 725 946 46% -19%
5 8 Yuba 165 68 73 985 109% -9%
6 -2 San Bernardino 4820 2302 1875 1096 25% 24%
7 -1 Solano 809 383 363 1176 21% -1%
8 6 Madera 235 107 126 1198 50% 20%
9 49 Alpine 1 0 1 1222 ND ND
10 5 Kern 1546 711 625 1308 64% 8%
11 -3 Sacramento 2422 1105 1043 1366 26% -23%
12 0 Imperial 134 45 117 1506 21% 17%
13 -2 Calaveras 17 7 30 1538 15% -9%
14 2 Monterey 483 223 274 1564 41% 27%
15 -5 Colusa 9 5 14 1565 17% 75%
16 -7 Contra Costa 1736 740 619 1699 2% -21%
17 17 Mono 1 0 8 1720 167% ND
18 0 Sutter 126 43 54 1776 54% -17%
19 -12 San Benito 44 17 32 1806 -20% -24%
20 1 Placer 478 225 174 1916 50% -7%
21 5 Lake 1 0 33 1941 74% -34%
22 5 El Dorado 240 100 88 2042 80% 26%
23 2 Fresno 1170 536 411 2265 34% -1%
24 5 Yolo 178 88 85 2342 37% 9%
25 -1 Tulare 489 202 183 2378 27% 38%
26 -3 San Diego 3353 1443 1276 2466 25% 3%
27 3 Tuolumne 40 32 22 2582 38% 100%
28 -8 Mariposa 1 0 7 2629 0% 250%
29 6 Tehama 1 0 23 2714 53% 10%
30 -8 Shasta 165 99 66 2761 6% 27%
31 -14 Amador 42 26 13 2919 -13% 44%
32 -4 Sonoma 362 195 159 3047 14% -29%
33 -1 Nevada 98 47 32 3100 19% 52%
34 18 Modoc 1 0 3 3234 200% -50%
35 -2 Ventura 852 313 255 3261 16% 1%
36 -5 Sierra 1 0 1 3380 0% ND
37 9 Butte 162 71 65 3391 86% 81%
38 0 Alameda 1486 654 421 3665 11% -10%
39 -2 Los Angeles 9150 3610 2797 3705 12% 15%
40 2 Napa 134 48 36 3797 29% -29%
41 -1 Santa Barbara 320 100 106 3978 12% -3%
42 -6 Orange 1641 608 757 4123 -1% 2%
43 -2 Glenn 1 0 7 4171 0% 75%
44 0 San Luis Obispo 190 78 64 4208 16% 8%
45 2 Mendocino 50 23 21 4293 40% 110%
46 -1 Santa Cruz 164 72 62 4299 27% 19%
47 -8 Santa Clara 1465 543 415 4427 -3% 21%
48 2 Siskiyou 29 10 10 4597 100% 67%
49 -30 Plumas 18 5 4 5229 -50% -20%
50 -7 Kings 107 45 28 5516 -15% -43%
51 2 Marin 108 42 41 6278 95% 116%
52 -4 San Mateo 222 88 115 6430 8% 58%
53 1 Trinity 13 4 2 6983 100% ND
54 -5 Lassen 1 0 5 7151 25% -38%
55 2 Inyo 1 0 2 9076 100% 100%
56 -5 Humboldt 37 16 12 11068 -14% -25%
57 -2 Del Norte 2 0 2 14710 0% ND
58 -2 San Francisco 167 42 36 22903 -16% 20%

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CALIFORNIA FORECLOSURE REPORT METHODOLOGY
Rankings are based on population per foreclosure sale. NDF indicates the number of Notices of Default that were filed at the county, and NTS indicates filed Notices of Trustee Sale. Sales indicates the number of properties sold at foreclosure auction. Percentage changes are based on monthly Sales. The data presented by ForeclosureRadar is based on county records and individual sales results from daily foreclosure auctions throughout the state—not estimates or projections.

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