Mortgage Defaults in California Decline 19%
20 July 2011
The number of mortgage defaults in California has fallen by 19% during the second quarter of the year compared to the same period in 2010. This is the lowest level in four years and is due to a slow in falling prices and a change to foreclosure procedures.
In total, 56,633 default notices were recorded during the second quarter of 2011, which is 17% less than the first quarter, and is the lowest number since the second quarter of 2007 according to figures from DataQuick. The number of defaults peaked during the first quarter of 2009, which is when the median price dropped by nearly 40%, and analysts are now speculating that the worst of the price falls are over, provided the economic news doesn't get any worse. The median price of a Californian home was $250,000 in the second quarter, which is 7.4% less than a year earlier.
The majority of foreclosures are originating from loans given between 2005 and 2007, with JP Morgan Chase & Co having the highest number of loans in foreclosure at 9, 422, closely followed by Wells Fargo & Co at 8, 228 while the bank of America Corp fared a little better with 7,601 loans in foreclosure.
Following investigations by federal regulators and state attorneys into bank documentation errors which uncovered the robo-form signing scandal, mortgage lenders have been forced to change their foreclosure properties. However there have been recent concerns that some banks are still not following the correct procedures, and investigations are still ongoing.