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California Foreclosure Activity Back Up, Los Angeles County Foreclosures Up But 11.3% less than 2010

DataQuick - After dropping to a three-year low in the second quarter of this year, the number of California homeowners being pulled into the foreclosure process snapped back to prior levels over the last three months, a real estate information service reported.

In Los Angeles County 14,367 foreclosures were registered. Still down from 16,189 in same quarter of 2010.

A total of 71,275 Notices of Default (NoDs) were recorded at throughout the state. That was up 25.9 percent from 56,633 for the prior three months, and down 14.4 percent from 83,261 in third-quarter 2010, according to San Diego-based DataQuick.

Last quarter's 71,275 NoDs, which mark the first step in the formal foreclosure process, jumped back to levels seen earlier this year and late last year. Lenders filed 68,239 NoDs during first-quarter 2011 and 69,799 in fourth-quarter 2010. NoDs peaked in first-quarter 2009 at 135,431.

Los Angeles County registered 6453 Trustee Sales down -8.5% from 7,049 in the same quarter of 2010.

Statewide Trustees Deeds recorded (TDs), or the actual loss of a home to foreclosure, totaled 38,895 during the third quarter. That was down 8.4 percent from 42,465 for the prior quarter, and down 14.3 percent from 45,377 for third-quarter 2010. The all-time peak was 79,511 in third-quarter 2008. The state's all-time low was 637 in the second quarter of 2005, DataQuick reported.

Most of the loans going into default are still from the 2005-2007 period: the median origination quarter for defaulted loans is still third-quarter 2006. That has been the case for almost three years, indicating that weak underwriting standards peaked then.

The most active beneficiaries in the formal foreclosure process last quarter were Bank of America (14,325), Bank of New York (11,052), and Wells Fargo (9,740).

Defaults by price segment show that distress is not spread evenly, with lower-cost neighborhoods bearing the brunt. Last quarter, zip codes with year-to-date median sale prices below $200,000 collectively saw 11.0 default notices filed per 1,000 homes. That compares with 8.1 NoDs filed per 1,000 homes for all zip codes statewide, and just 2.8 NoD filings per 1,000 homes in zips with medians above $800,000.

Also, the state's relatively large 25.9 percent, quarter-to-quarter rise in NoDs was just over double the magnitude of the increase for the group of zips with $800,000-plus medians. Combined, those pricier areas saw NoD filings rise 12.1 percent from the prior quarter.

On primary mortgages, California homeowners were a median eight months behind on their payments when the lender filed the Notice of Default. The borrowers owed a median $19,198 on a median $331,333 mortgage. The median amount borrowers owed at the time the NoD was filed rose about 17 percent from the prior quarter and 27.0 percent from a year earlier. The gains likely stem from some lenders working faster last quarter to get caught up on their backlogs of long-delinquent loans.

On home equity loans and lines of credit in default, borrowers owed a median $4,576 on a median $70,055 credit line. The amount of the credit line that was actually in use cannot be determined from public records.

There are 8.7 million houses and condos in the state.

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