MDA DataQuick: California Defaults Rise In Q3

The number of foreclosures initiated by servicers between July and September rose on a quarter-to-quarter basis for the first time since early last year, but the number of loans that completed the process dipped from the previous quarter, San Diego-based MDA DataQuick reports.

A total of 83,261 default notices were recorded at county recorder offices between July and September – up 18.9% from 70,051 in the prior quarter. The peak occurred in the first quarter of 2009, when 135,431 notices were filed.

The number of trustees deeds recorded, which reflects the number of houses and condos foreclosed on, totaled 45,377 during the third quarter, DataQuick reports. That total was down 4.8% from 47,669 for the prior quarter.

"Over the past year, with some minor ups and downs, financial institutions and their servicers have been processing a fairly steady number of defaults each quarter,’ says John Walsh, president of DataQuick. ‘That probably has more to do with their capacity to process defaults than with higher or lower levels of incoming distress.’

The timeline for properties to move through the foreclosure process dropped quarter over quarter from 9.1 months to 8.7 months. A year earlier, the process took seven months, on average. Data from last year could reflect, among other things, lender backlogs and extra time needed to pursue possible loan modifications and short sales, DataQuick says.

The firm also reports that the spreading of defaults from lower-cost submarkets up into more expensive neighborhoods has receded slightly. California's 83 ZIP codes with median sale prices above $800,000 this year logged a 1% quarter-over-quarter decrease in default notices and a 28.3% annual decrease.

The lenders that originated the most loans that went into default last quarter were Countrywide, Bank of America, World Savings, Wells Fargo and Washington Mutual. The companies were also the most active lenders in 2006.

Bank of America, Wells Fargo, Mortgage Electronic Registration Systems (MERS) and JPMorgan Chase were the most active ‘beneficiaries,’ according to public records reviewed by DataQuick.

The trustees that pursued the highest number of defaults last quarter were ReconTrust Co. (mostly for Bank of America and MERS), Quality Loan Service Corp. (Bank of America and JP Morgan Chase), Cal-Western Reconveyance (Wells Fargo) and NDEx West (Wells Fargo).



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