Palm Springs Area Foreclosures Drop 13%

From our local newspaper, The Desert Sun:

Foreclosures fell 13 percent across the Coachella Valley in December compared to the same month a year ago, a report shows.

There were 984 mortgage default notices, bank repossessions and foreclosure auctions filed valley-wide last month, compared to 1,123 in November, Irvine-based RealtyTrac reported.

The decrease comes after a 5.7 percent increase in November that ended seven months of double-digit declines.

The December numbers would show an even larger decline of 22 percent if Thermal had not posted a 94.7 percent increase in foreclosure activity. Foreclosures there jumped from 19 to 37 during the month, RealtyTrac reported.

Bret Cohn, a mortgage consultant and senior vice president of Franklin Loan Center in Palm Desert, said the drop in foreclosure activity is partly because of a moratorium that was in place during this past holiday season.

Several large mortgage lenders, along with Fannie Mae and Freddie Mac, announced last year they would not foreclose on delinquent borrowers during the holidays from Dec. 19 to Jan. 2, although legal and administrative proceedings for evictions could continue.

“There is also a lot of pressure coming from the White House to try to work with delinquent homeowners to either work out the loans through modification or allow homeowners to ‘short sell' their homes, rather than go through foreclosure,” Cohn said.

Cohn, other analysts and mortgage experts expect to see an increase in foreclosure activity in the months ahead, however, as long-delayed foreclosure action begins to kick back into gear.

Brandon Moore, RealtyTrac CEO, said the lack of clarity regarding many of the documentation and legal issues that have plagued the foreclosure activity “means we are continuing to see a highly dysfunctional foreclosure process” that is inefficiently dealing with the delinquent mortgages.

At the same time, the office of the U.S. Comptroller of the Currency noted in a report that most applicants who meet the income and other qualifications for loan modifications on their homes already have received assistance.

The OCC reported that the number of loans modified annually rose from 421,322 in 2008 to 939,226 in 2010, then fell to 310,018 through the third quarter of 2011.

RealtyTrac reported about 1.9 million U.S. homes were hit with default notices, foreclosures and other actions in 2011. That was down from 2.9 million in 2010.

About 5.16 percent of homes in the Riverside-San Bernardino-Ontario region had at least one foreclosure filing — the fifth-highest rate of 18 in the most recent national report.

It took an average of 348 days to complete the foreclosure process nationwide, RealtyTrac reported, up from 336 days in the third quarter and up from 305 days in the fourth quarter of 2010.

In California, 3.2 percent of homes logged a foreclosure filing in 2011, down from 4.1 percent in 2010.