A total of 81,054 notices of default (NODs) were recorded at county recorder offices in California during the first three months of the year – a 4.2% decrease from the fourth quarter of 2009 and a 40.2% drop-off from a year earlier, according to new data from MDA DataQuick.
The year-ago total – 135,431 NODs – is the highest in DataQuick's statistics, which go back to 1992 for NODs. The quarterly average is 44,041, while the low of recent years was 12,417 in the third quarter of 2004, when housing market annual appreciation rates were around 20%.
‘We are seeing signs that the worst may be over in the hard-hit entry-level markets, while problems are slowly spreading to more expensive neighborhoods,’ says DataQuick President John Walsh. "We're also seeing some lenders become more accommodating to workouts or short sales, while others appear to be getting stricter about delinquencies. It's very noisy out there."
The state's most affordable sub-markets, which represent 25% of the state's housing stock, accounted for 47.5% of all default activity a year ago. In the first quarter of this year, that share fell to 40.9%.
California's mid- to high-end housing markets were more likely to have seen a rise in mortgage defaults last quarter, though the concentration of default activity – which DataQuick measures by defaults per 1,000 homes – remained relatively low in those areas.
ZIP codes statewide with median home sale prices of $500,000-plus, for example, saw mortgage defaults buck the overall trend and rise 1.5% last quarter compared with the prior quarter, while year-over-year the decline was 19% (versus a 40.2 percent market-wide annual decrease). Collectively, these ZIPs saw 4.5 default notices filed for every 1,000 homes in the community, compared with the overall market's rate of 9.3 NODs for every 1,000 homes statewide.
In ZIP codes with medians below $500,000, mortgage default filings fell 5.8% from the prior quarter and declined nearly 43% from a year earlier. However, collectively these ZIPs saw 10.5 NODs filed for every 1,000 homes – more than double the default rate for the zips with $500,000-plus medians.
On primary mortgages, California homeowners were a median five months behind on their payments when the lender filed the NOD. The borrowers owed a median $14,066 in back payments on a median $330,147 mortgage.
On home equity loans and lines of credit in default, borrowers owed a median $3,897 on a median $64,422 credit line. DataQuick notes that the amount of the credit line that was actually in use cannot be determined from public records.
On average, homes foreclosed on last quarter spent 7.5 months winding their way through the formal foreclosure process, beginning with an NOD, DataQuick adds. A year ago, the process took, on average, 6.8 months.
Foreclosure resales accounted for 42.6% of all California resale activity last quarter – up from a revised 40.6% the prior quarter and down from 57.8% a year ago, the peak. Foreclosure resales varied significantly by county last quarter, from 13.8 percent in San Francisco to 67.7 percent in Merced.
At formal foreclosure auctions last quarter, an estimated 24.6% of foreclosed properties went to investors and others who do not appear to be lender or government entities. That's up from an estimated 17.6% a year ago.
SOURCE: MDA DataQuick