San Diego Bank Foreclosures Slowing, but Defaults Rising

by on cities

San Diego bank foreclosures slowed in September, but mortgage defaults continued to rise as unemployment continued to be above the 10 percent level.

Based on a report from a California based real estate research firm, a total of 1,101 foreclosures were posted for trustee deed sales in September, marking a drop of 7.6 percent from the previous month and a decrease of over 39 percent from September last year.

The number of default notices, meanwhile, increased by nearly 3 percent from August to 2,726 in September. The number was more than twofold than the 1,206 default notices filed in September last year.

Foreclosure postings in San Diego hit their peak of 2,004 in July last year and default notices reached their highest level of 3,832 in March this year.

In contrast to the San Diego trend, foreclosures statewide increased in the July to September quarter. A total of 50,013 foreclosures were posted for trustee sales, marking an increase of 9.5 percent from the previous quarter but a drop of more than 37 percent from last year’s third quarter.

Default notices decreased to 111,689, marking a drop of over 10 percent from 124,562 in the previous quarter but posting an increase of 18.5 percent from more than 94,200 notices sent in last year’s third quarter.

San Diego bank foreclosures that are still in market listings dropped in number to 3,800 units, comprising almost 18 percent of total foreclosures. The percentage marked a drop from the 34.7 percent share one year ago.

Statewide, the number of foreclosure homes that have not been resold dropped to over 57,000 units or 18 percent of all foreclosures, marking more than 50 percent of decrease over the past year.

The researchers observed that foreclosure properties no longer dominate total home sales, but they expect the percentage to climb up again when lenders complete their delayed foreclosure actions.

In the July to September quarter, the number of default notices sent to borrowers in San Diego County climbed up to 8,702, an increase from 7,062 in last year’s third quarter.

The drop in foreclosures was attributed by the researchers to efforts of lenders to regulate the flow of low-priced foreclosures into the market. They know that overloading the market with foreclosed properties will put out the small indications of recovery shown by the market.

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