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Defaults on homes rise in the valley First time region saw a year-over-year spike in activity since November 2009
2011-12-24

Foreclosures rose nearly 6 percent across the Coachella Valley in November compared to the same month a year ago, ending a seven-month trend of double-digit declines.

The 5.7 percent increase in foreclosure activity comes after declines of 32 percent in October, 36 percent in September and 16 percent in August.

It was the first time since November 2009 that the inland region saw a year-over-year increase in foreclosure activity.

The spike wasn't unexpected. Many real estate experts anticipated that filings would jump as lenders and mortgage servicers began ending the voluntary suspensions of foreclosure actions that they initiated in late 2010.

Lenders that put temporary holds on foreclosure filings have been resolving problems with processing and paperwork, said Bret Cohn, senior vice president with Franklin Loan Center in Palm Desert.

Many lenders' problems began with a national “robo-signing scandal” and litigation that stifled foreclosure activity. At the same time, many banks bowed to pressure to pursue more alternatives to foreclosures such as trial- period plans or loan modifications.

Other, seasonal factors likely contributed to November's increase in foreclosure activity, said Jim Franklin, broker associate with Prudential California Realty and president of the Palm Springs Association of Realtors.

“In November, lenders file more trustee sales notices so they're ready to go in January,” Franklin said. “I think the banks are more sensitive about not taking somebody's house at Christmas.”

The rise in foreclosure activity was experienced throughout Southern California. In Riverside and San Bernardino counties, 11,739 notices of default, trustee sales and bank repossessions were filed last month.

That marked a 19 percent increase from a year ago and a 25 percent jump from October, RealtyTrac reported.

More than 5,300 new default notices were mailed to homeowners in the region in November, a 35 percent year-over-year increase.

Not since November 2009 has the region seen a year-over-year increase in foreclosure activity, RealtyTrac reported.

James Saccacio, RealtyTrac co-founder, said the “bellwether states” of California, Arizona and Massachusetts all posted year- over-year increases in foreclosure activity.

The number of scheduled trustee sales in California last month climbed 14 percent to 26,509, marking a 10-month high and helping the state maintain the second-highest foreclosure rate behind Nevada.

Notices of trustee sales are the final step before homes with delinquent mortgages go to auction.

There were 463 scheduled trustee sales notices in November in the Coachella Valley, up from 250 in October, RealtyTrac reported. Trustee sales for all of the inland region rose 74 percent from October and 7 percent from November 2010.

In the Coachella Valley, one in every 164 housing units had some sort of foreclosure filing in November, compared to one in 195 during October.

One in 211 properties in California had a foreclosure filing, compared to the national figure of 1 in every 579 housing units.

Nationally, the number of new foreclosures increased 21 percent during the third quarter, according to the federal Office of the Comptroller of the Currency. There were 347,726 newly initiated foreclosures from July through September, and nearly 1.33 million foreclosures were in process nationwide at the end of the quarter.

Despite the increase in foreclosure activity, there continued to be fewer distressed sales of homes and condos during November compared to a year ago, the California Desert Association of Realtors reported.

Bank-owned and short sales accounted for 51 percent of single-family home sales in November, down from 59 percent in November 2010. And distressed properties accounted for 33 percent of valleywide condo sales last month, a 44 percent decline from the same month a year ago.