While a 93.1% YOY increase in San Francisco “Notice of Default” (NOD) activity last quarter sounds quite dramatic, in absolute terms it still represents relatively few properties (334). But the number is growing. And as is happening statewide, we’re seeing an increase in the percentage of notices that end up being bank owned.
Of the homeowners in default [throughout California], an estimated 41 percent emerge from the foreclosure process by bringing their payments current, refinancing, or selling the home and paying off what they owe. A year ago it was about 71 percent. The increased portion of homes lost to foreclosure reflects the slow real estate market, as well as the number of homes bought during the height of the market with multiple-loan financing, which makes ‘work-outs’ difficult.
Within the greater Bay Area, Contra Costa hit a record level of Q4 default activity (3,805 notices, up 151.8% year-over-year) as did Sacramento (5,807 notices, up 120.4% year-over-year). And neither Alameda (2,573 notices, up 119.4%) nor Santa Clara (2,162 notices, up 147.4%) were too far behind.
Most of the loans that went into default last quarter were originated between August 2005 and October 2006. The median age was 22 months, up from 15 a year earlier, indicating that the pool of at-risk home loans is getting larger.
And as we wrote nine months ago, “keep in mind that long-term interest rates remain near historic lows, and according to most, the Bay Area economy remains strong (and incomes are up).”
∙ California Foreclosure Activity Still Rising [DQNews]
∙ Bay Area “Notices Of Default” Heading North? (So To Speak) [SocketSite]