Bank repossessions, the final stage of the foreclosure process, fell 9 percent month-to-month and were down 35 percent from a year ago. Still the numbers are on pace for nearly a half a million properties to be repossessed in 2013. That’s an improvement, but still well above normal levels.

(Read More: Dire Predictions For Housing Recovery)

The picture is also mixed geographically – Arkansas (up 143 percent), Oklahoma (up 103 percent), Maryland (up 74 percent), Washington (up 71 percent), New Jersey (up 33 percent), and New York (up 21 percent) –as states that require a judge in the foreclosure process as well as those with new laws protecting borrowers, are seeing a spike in repossessions.

Article source: http://www.cnbc.com/id/100877414

Bank repossessions, the final stage of the foreclosure process, fell 9 percent month-to-month and were down 35 percent from a year ago. Still the numbers are on pace for nearly a half a million properties to be repossessed in 2013. That’s an improvement, but still well above normal levels.

(Read More: Dire Predictions For Housing Recovery)

The picture is also mixed geographically – Arkansas (up 143 percent), Oklahoma (up 103 percent), Maryland (up 74 percent), Washington (up 71 percent), New Jersey (up 33 percent), and New York (up 21 percent) –as states that require a judge in the foreclosure process as well as those with new laws protecting borrowers, are seeing a spike in repossessions.

“The increases in judicial foreclosure auctions demonstrate that these delayed foreclosure cases are now being moved more quickly through to foreclosure completion,” notes RealtyTrac’s Daren Blomquist in the report.

(Read More: Map: Tracking the US Real Estate Recovery)

“Given the rising home prices in most of these markets, it is an opportune time for lenders to dispose of these distressed properties, either at the foreclosure auction to a third-party buyer, or by repossessing the property at the auction and subsequently selling it as a bank-owned home.”

Judicial foreclosure auctions were up 34 percent from June of 2012, as Realtors report “brisk” sales of these distressed properties. Investors and regular buyers have been competing for a decreasing supply of properties. Nationwide, inventories of all homes are down dramatically, as a large number of underwater borrowers and borrowers with very little home equity are still unable to sell.

(Read More: Apartments Reap Rewards of Rising Rates)

Florida, Nevada, Illinois, Ohio and Georgia posted the top five state foreclosure rates for the first half of the year, according to RealtyTrac.

Article source: http://www.cnbc.com/id/100877414

“Market prices have to go higher to provide incentives for more new houses to be built,” said Aaron Edelheit, CEO of Atlanta-based The American Home, a company that invests in distressed properties and turns them into rentals. “I believe we are on the cusp of a massive housing shortage in many parts of the country due to the historic lack of residential investment in the last five years. This summer, I expect the housing market to be ‘blue flame’ hot.”

(Read More: What Tops Home Buyers’ Wish List Now)

Prices today are rising fast because supplies of homes for sale are so low. Both new and existing homes are running near four month supplies.

For new homes, builders just aren’t able to start fast enough, due to labor and land restraints.

For existing homes, there are fewer distressed properties for sale, a segment that has driven the market into recovery, and organic homeowners are either unwilling to list their homes for fear of selling at the bottom, or unable to list because they are still underwater on their mortgages.

(Read More: Foreclosures Fall Due to New Laws)

“Taking new and existing homes together, the relationship between the months’ supply of unsold homes and house prices points to an acceleration in the pace of house prices gains in the year ahead,” said Paul Diggle of Capital Economics.

Article source: http://www.cnbc.com/id/100496564

(Read More: Foreclosures Fall Due to New Laws)

Regionally the Northeast saw improvements in builder sentiment, as did the West, but the Midwest and South both slipped, down two points each. The Northeast is seeing gains in construction due to the rebuilding effort following Superstorm Sandy. That was apparent in another index released Monday gauging home remodeling. The Buildfax remodeling index showed seasonally adjusted annual rates of remodeling in the Northeast at 636,000 in December of 2012 — up 39 percent from November and up 37 percent from a year ago.

“The last time the Northeast broke 600,000 estimated residential remodels was five years ago,” wrote BuildFax’s Joe Emison in a release. “Unfortunately, the rest of the country saw both month-over-month and year-over-year declines in residential remodeling activity.”

Article source: http://www.cnbc.com/id/100469988

“I do think some of these delinquent properties will still end up as foreclosures down the road,” notes Blomquist. “But this type of legislation is also forcing lenders to consider other creative ways of disposing of the delinquencies that may not be as difficult as foreclosure has become.”

That includes short sales, deeds in lieu of foreclosure and a growing trend of selling off bad loans to investors. The investors, since they are buying at a deep discount, are able to offer more drastic modifications to keep borrowers in their homes.

(Read More: Americans Are UsingTheir Houses as ATMs Again)

Short sales, when the property is sold for less than the mortgage, are becoming ever more frequent. Nearly 26 percent of Southern California home sales in January were short sales, according to DataQuick, while just 15 percent were foreclosure sales. Investor and cash buying was at or near record levels.

“A lot of today’s housing demand is fueled not by spectacular job growth and soaring consumer confidence, but by super-low mortgage rates and unusually high levels of investor and cash purchases. Take away any one of those elements and it will matter,” said John Walsh, DataQuick president.

With legal changes in California, Florida now has the dubious distinction of having the most properties with foreclosure filings in the nation. One in every 300 homes had a filing in January, according to RealtyTrac. That is twice the national average.

(Read More: Big Banks Told to Review Their Own Foreclosures )

States that require a judge in the foreclosure process, like Illinois and New Jersey, saw big January jumps in foreclosure auctions (sales back to the bank or to an investor), but non-judicial states saw the biggest increases in newly started foreclosures. In Nevada, where new legislation slowed the process dramatically last year, foreclosure starts were up 87 percent from a year ago.

While the numbers can be parsed in many ways, the bottom line is that while fewer borrowers are getting into trouble, an enormous backlog of distress is still moving through the foreclosure system, in some places quite quickly, and in others ever more slowly. Until the overall numbers come down to a more normal level, any speculation on overall price stability is risky at best.

(Read More: Mortgage Mess StillMires US Housing Recovery)

Article source: http://www.cnbc.com/id/100460456

Delinquencies dropped 6 percent annually in 2011 and 7 percent in 2010. This after jumping over 50 percent in each of the previous two years. The trouble is not with new loans but with a long legacy of troubled loans from the housing boom. While these loans make up 60 percent of mortgages outstanding, they account for 90 percent of loans gone bad. Attempts at loan modifications as well as long delays in the foreclosure process have kept these loans stuck in a bloated pipeline.

There are borrowers today that have not made a mortgage payment in several years but have still not lost their homes. New laws in California and Nevada slowed the foreclosure process considerably, while New York and New Jersey are still facing huge backlogs of bad loans that will take years to make their way through the states’ court process.

(Read More: New Housing Fears: Home Prices Are Rising Too.)

Nationally, the mortgage delinquency rate now stands at 5.19 percent, down from 6.01 percent a year ago, but still far from the historical average of around one to two percent. While loans made in the past few years, using far stricter underwriting, are faring very well, there is a concern that thousands of mortgage modifications made during the same time will default again. Negative equity, while improving, continues to plague millions of borrowers and makes selling the home impossible. Should these borrowers need to move, they will likely have to default on their home loans.

(Read More: Why Home Builders Won’t Drop New Home Prices,)

Article source: http://www.cnbc.com/id/100453098

The report from San Diego’s DataQuick highlights how the foreclosure crisis appears to be subsiding after running rampant for five years.

“For more than a year, the general trend has been down” for legal filings that indicate mortgage distress, said DataQuick analyst Andrew LePage.

There are several reasons that foreclosure activity is trending down. As home values have risen over the past year, fewer homeowners are underwater, which means they can more easily refinance or sell their homes if they have trouble keeping up with their mortgage.

Financial hardship is also diminishing. “The other big factors are the pickup in the economy and the improvements in job growth that keep people from getting in trouble in the first place,” LePage said.

On top of that, various new laws and legal settlements between banks and the government encourage lenders to pursue alternatives to foreclosure, such as loan modifications and short sales (selling for less than is owed on the mortgage).

While LePage noted that the effects of the law and settlements are hard to measure, the net impact is fewer foreclosures.

Most subprimes gone

Moreover, the bulk of risky subprime loans have already gone through foreclosure. Mortgages issued from 2008 “were safer and saner,” LePage said, meaning they are unlikely to have the sharp payment spikes of teaser-rate subprimes.

For the fourth quarter, DataQuick reported that 5,399 households in the Bay Area received default notices, the first step in the foreclosure process. That was down 46.1 percent from the same quarter of 2011. About half of default notices become foreclosures.

Although lenders can file notices of default once borrowers are three months behind, DataQuick said that Californians receiving the notices were a median of eight months in arrears on their primary mortgages.

Statewide, notices of default were down 37.9 percent in the quarter, to 38,212.

Trustee deeds, the final step of foreclosure, were issued for 2,765 Bay Area homes in the fourth quarter. That was down 42.8 percent from the same quarter of 2011.

Statewide, trustee deeds were down 32.4 percent, to 21,127 in the fourth quarter.

Looking at the full year also showed declines. The Bay Area had 30,046 default notices in 2012, down 30.7 percent from 2011. The nine-county region had 1,907 trustee deeds in 2012, a 41.2 percent decline from 2011.

While the numbers are the lowest in six years, many homeowners still struggle to keep their houses.

Oakland’s Peggy Hart, 61, for instance, said income from her day care business took a big hit a few years ago. Three years ago, when she first applied for a loan modification, bank representatives told her to stop paying her mortgage and she complied, she said. Wells Fargo gave her a loan modification early on, but the payments were still too high and she was unable to keep up, she said.

Changes are tough

Now her business and her income have rebounded, but her efforts to get a loan modification have been frustrating and unsuccessful, she said.

“I’m able to pay, I want to pay my mortgage,” she said. “I told (Wells) on the phone, ‘Please let this happen for me.’ “

Hart lives with her two sons, granddaughter and a baby great-grandson in the house, where they also run the day care. She owes about $200,000 on the house, which various real estate sites estimate is worth at least $390,000.

“Wells Fargo continues to work with borrowers on mortgage modifications and other options that may help them remain in their homes and avoid foreclosure when possible,” the bank said in a statement. “We have been working with Ms. Hart for over three years to identify an option that would allow her to retain this home. We were able to provide her with some temporary assistance in September 2009 while we continued to look at home retention options.”

Both foreclosures and notices of default remain more common in lower-cost areas, DataQuick said.

Over the past five years, 1.1 million of California’s 8.7 million houses and condos received a foreclosure notice, it said. Of those, 780,000 were actually lost to foreclosure. The others were either sold or the payments were made current.

At the courthouse auction where the final step of foreclosure takes place, about 42 percent of properties in the fourth quarter were purchased by investors, DataQuick said. That was up from 31.2 percent a year earlier.

Fewer foreclosures

Fewer people in the Bay Area and California lost homes to foreclosure in the fourth quarter compared with a year earlier; and fewer received notices that they were behind in payments. For the full year, both notices of default (the first step in the foreclosure process) and trustee deeds (the final step of foreclosure) were down compared with 2011.

Notices of Default

Houses and condos, fourth quarter

Trustee deeds recorded

Houses and condos, fourth quarter

Sources: DataQuick, DQNews.com

Carolyn Said is a San Francisco Chronicle staff writer. E-mail: csaid@sfchronicle.com

Article source: http://www.sfgate.com/realestate/article/Foreclosures-drop-in-Bay-Area-California-4218858.php