The IML Real Estate Blog

Orange County Foreclosure Report - Foreclosures Increasing

October 8th, 2010 3:55 PM by Dave Gubler

Orange County Foreclosure Trends - Number of Foreclosures Increasing Dramatically.

If you are currently delinquent on your home loan(s) and a Notice of Default has already been filed you should be aware of a trend toward foreclosure rather than resolution in Orange County California. While the number of initial foreclosure filings (Notice of Default) is down from 2009 to 2010, the number of foreclosure filings has increased steadily in Orange County now for three consecutive months (an increase in June, July & August) and is forecasted to rise even more.

Foreclosure Filings-Notice of Default filings are the first step in the foreclosure process. Notice of Trustee Sale filings set the date and time of an auction, and serve as the homeowner's final notice before sale.

Even more alarming is the current trend in Foreclosure Outcomes in Orange County. Foreclosure cancellations have dropped sharply; this means banks are not completing loan modifications and are foreclosing rather than modifying. The number of foreclosures (Back to Bank) increased by over 20% from July 2010 to August 2010 and are up over 16% from 2009 to 2010. This is ominous proof that the era of loan modifications has passed and the banks/lenders are signaling their readiness to accept their losses on the books and liquidate non-performing assets.

Foreclosure Outcomes-After the filing of a Notice of Trustee Sale, there are only three possible outcomes. First, the sale can be Cancelled for reasons that include a successful loan modification or short sale, a filing error, or a legal requirement to re-file the notice after extended postponements. Alternatively, if the property is taken to sale, the bank will place the opening bid. If a 3rd party, typically an investor, bids more than the bank's opening bid, the property will be Sold to 3rd Party; if not, it will go Back to the Bank and become part of that bank's REO inventory.

If you have been turned down for loan modification or your loan modification process has gone on longer than 6 months and notice of default has already been filed I strongly urge you to look at your other foreclosure alternatives - namely a short sale. Although you will not keep your home the benefits of a short sale over foreclosure are well documented and should be examined. Time is often the issue. I have spoken to many distressed homeowners that wait until it is too late to utilize short sale as an effective measure and are saddled with a foreclosure and it's long standing consequences. Learn everything you can about your foreclosure alternatives, all about short sales and the facts about loan modification so that you are able to make the best decision for you and your family.

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Posted by Dave Gubler on October 8th, 2010 3:55 PM



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