This should be the first you hear of July foreclosure data from any source.
Each month I do a foreclosure report for the state of CA. CA makes up roughly 35% of the total unit count and 40-45% of the total dollar volume of all foreclosures in the nation. ForeclosureRadar supplies the best data available and I add in my mojo each month. Below are the previous two months reports.
- Mr Mortgage: June CA Foreclosure Report…Conditions Arguably Worsen
- Mr Mortgage – RECORD-BREAKING MAY CA FORECLOSURE REPORT
Sean O’toole, CEO of Foreclosure Radar, was interviewed for a CNN Money story released today and spilled the beans early. Since its now in the public domain I can let out the headline foreclosure data early. Make sure to click that link and read the story. It pertains to the new FHA bailout law and the $4 billion waste of money for states to rehab foreclosed houses.
July was another record month for foreclosures in the state of CA with all hell breaking lose and banks taking back roughly 26,500 homes for $12.5 billion. ‘Record-breaking’ is not a good thing in the foreclosure universe. This 25% increase breaks all records ever posted and all foreclosure estimates.
If past percentages hold true, next week when the national numbers are released by other data sources, the numbers should also show a similar increase. However, not everyone gathers data the same way so I can’t guaranty what others will report. If their data do mirror this report, I do not know how the markets will react to this but many times in the past, they have not responded very well to ‘surging foreclosure rates’.
In May we passed $10 billion for the first time with $10.4 billion in loans, or roughly 24k homes, going back to the banks. In June, there were $10.2 billion in loans taken back by the banks, a slight drop. This was an encouraging sign until July’s figures were tallied.
To clarify, when I say ‘loans taken back by banks’, these are actual foreclosures. When a home goes to the auction block the bank puts up the opening bid. If no 3rd party bidder comes in, the bank buys it back. All year long in CA at least, banks have been buying back roughly 97-98% of all homes that go on the auction block. That is an astounding figure in and of itself!
This $12.5 billion in foreclosures were from Notice-of-Defaults (NOD) from the February time frame. It takes roughly 140 days in CA to go from NOD to foreclosure auction currently due to the back log. In Feb we had a drop in NOD’s to about 37k due to Feb being a short month. But from March though June we saw NOD’s shoot back up to record levels of about 43k per month (see chart below). This means that the number and dollar amount of foreclosures from Sept through Oct at least should be even greater than July by 10-20% depending on fluctuating cure rates.
My official report will be out in a few days when I will have the final Notice-of-Default, Notice-of-Trustee sale and foreclosure sale figures. I will also release my monthly YouTube video and forward analysis at that time. Until then. Best, Mr Mortgage
CA Housing Market Chart through June 2008. Please note this chart does NOT have July data, as it is not all available as of yet.
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