Mixed foreclosure bag

L.A. County had 21,850 filings in the third quarter, which is down from 24,622 for the previous three months but still way higher than for the third quarter of 2008. That was pretty much the story throughout Socal, according to Dataquick. Does the drop from the April-June period mean that the worst is over? Not necessarily. From the DataQuick press release:

"It may well be that lenders have intentionally slowed down the pace of formal foreclosure proceedings. If so, it's not out of the goodness of their hearts. It's because they've concluded that flooding the market with cheap foreclosures in this economic environment may not be in their best financial interest. Trying to keep motivated, employed homeowners in their homes might be the most cost-efficient way to stem losses," said John Walsh, DataQuick president.

The foreclosure dynamics are very complicated and hard to accurately measure. It's not just a question of how the economy is recovering - it's how lenders believe they can best resolve all these outstanding defaults.

The median origination month for last quarter's defaulted loans was July 2006, the same as during this year's first and second quarters. A year ago the median origination month was June 2006, so the foreclosure process has moved one month forward during the past 12 months. "There's a batch of truly nasty loans that were made in mid 2006. There's another batch made in late 2006. These are worse than the mortgages before and after, and it's taking a long time to process them," Walsh said.

Notices of Default

County/Region 2008Q3 2009Q3 Yr/Yr%

Los Angeles 17,073 21,850 28.0%

Orange 5,692 7,436 30.6%

San Diego 7,062 8,702 23.2%

Riverside 11,714 12,113 3.4%

San Bernardino 9,110 9,833 7.9%

Ventura 1,676 2,146 28.0%

Imperial 568 692 21.8%

San Francisco 353 607 72.0%

Alameda 3,482 3,940 13.2%

Contra Costa 4,103 4,753 15.8%

Santa Clara 2,814 4,035 43.4%

San Mateo 797 1,263 58.5%