San Diego Foreclosures for Sale Rose While Defaults Dropped

by on Foreclosures

San Diego foreclosures for sale climbed up by more than 9 percent in October from September, according to a report from a research firm. The analysts said that the increase showed that lenders pursued foreclosures on mortgages that were not saved by loan modifications or short sales.

Indicating that the foreclosure crisis may be easing, the pace of home loan defaults in the county of San Diego slowed down by 7 percent in October, compared to defaults in September.

A total of 2,536 default notices were filed in October, marking a decrease from 2,726 notices posted in September and a drop to the lowest level since November last year when the state of California required mortgage lenders to give borrowers some leeway before filing default notices.

However, the total number of loan defaults filed for the period from January to October this year has reached 31,215, a sharp increase from the 26,668 notices filed during the same ten-month period in 2008.

Some housing analysts believe that the number of default notices could have been higher if lenders did not delay sending notices to delinquent homeowners. They contend that many homeowners were in default by at least four months, but lenders suspended their foreclosure proceedings because they were trying to comply with pressure from state and federal regulators to reduce the number of San Diego foreclosures for sale.

Additionally, lenders do not want to repossess a lot of properties and overload the market with low-priced foreclosures, according to economists that include Alan Gin, who works with the University of San Diego.

Gin contended that foreclosures will increase in the coming months and then slow down. But he also said that the unemployment factor will reverse any positive forecast about foreclosure in 2010.

In San Diego, significant increases in default activity occurred in downtown San Diego and in the zip code areas of Golden Hill and Mission Valley. In contrast, defaults in the College area, Carmel Valley and Mira Mesa slowed down by 32 to 42 percent.

In zip code areas like La Mesa-Mount Helix, University City and western Rancho Bernardo, sales of foreclosure homes increased sharply by 100 percent to 220 percent from September sales while foreclosure sales in southern Escondido, College and Oceanside dropped by 23 to 33 percent.

According to Gin, foreclosures are now spreading from the lowest-cost areas to the higher-cost neighborhoods.

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