Foreclosures fall in L.A.

They were down 10 percent in October from the previous month, according to RealtyTrac numbers, though most of the drop-off has to do with a new state law that requires borrowers to be notified in advance of a filing. From the Business Journal:

One in every 325 homes in the county, 3,313 in total, were in foreclosure last month, said RealtyTrac, which tracks default notices, auction sale notices and bank repossessions. That rate is still 13 percent higher than a year earlier. Foreclosures in Orange County were down 34 percent month-over-month with one in 348 homes in foreclosure. In Ventura County, the rate was down 35 percent, with one in 328 homes in foreclosure.

There's considerable skepticism about whether the new notification process will make a dent in the number of foreclosures or simply delay the inevitable. By the way, today’s NYT has a good piece about the complexities of trying to modify loans. It’s not as easy as it might seem.

The problem is that financial executives have competing views on whether mortgages that were packaged — or securitized, in industry parlance — can be modified or not. These mortgages are no longer owned by the banks that service them; they are instead owned by numerous investors, and some in the industry think the investors may sue banks that modify mortgages. “The servicers are telling me they’re not in power at this time,” Representative Brad Sherman, Democrat of California, said. “You have 10 investors, and any one of them can allege from a purely negligence standpoint that the value of the portfolio has not been maximized.”