Notices of default (NODs) reversed course in California in the third quarter, increasing more than 25% from the second quarter, when filings hit a three-year low.
According to DataQuick, 71,275 NODs were recorded at county offices in the third quarter – up 25.9% from the 56,633 NODs recorded from April to June. Year-over-year, third-quarter NODs were down more than 14%. The third-quarter data represents a slight rise from the number of NOD filings in the fourth quarter of last year (69,799) and the first quarter of this year (68,239).
"The way it looks right now, it's reasonable to expect default filings to run at a somewhat higher level than we saw earlier this year," says John Walsh, DataQuick president. "Obviously, some lenders and loan servicers have begun to plow through their backlogs of delinquent loans more aggressively."
The most active beneficiaries in the formal foreclosure process last quarter were Bank of America (14,325), Bank of New York (11,052) and Wells Fargo (9,740). The most active trustees were ReconTrust Co. (mostly for Bank of America and Bank of New York), Quality Loan Service Corp. (Bank of America), California Reconveyance Co. (JPMorgan Chase), Cal-Western Reconveyance Corp. (Wells Fargo) and NDEx West (Wells Fargo).
First-mortgage California borrowers were a median eight months delinquent when the lender filed the NOD, DataQuick reports. According to the firm's data, the median amount borrowers owed at the time the NOD was filed rose about 17% from the prior quarter. In the third quarter, borrowers owed a median $19,198 on a median $331,333 mortgage.
The gains are likely the result of servicers working faster last quarter to clear their backlogs of long-delinquent loans, DataQuick says.
On home equity loans and lines of credit in default, borrowers owed a median $4,576 on a median $70,055 credit line.
Trustees deeds recorded (TDs) – or the actual loss of a home to foreclosure – totaled 38,895 during the third quarter – down 8.4% from 42,465 for the prior quarter and down 14.3% from 45,377 for the third quarter of 2010.
On the disposition end, foreclosure resales accounted for 34.2% of all resale activity in the state last quarter. That is down slightly from 35.6% in the first quarter and 35.5% a year ago.
DataQuick estimates that short sales made up an estimated 17.8% of statewide resale activity last quarter.