Foreclosure activity for houses in the Bay Area dropped during April, according to a new report set for release Thursday — but that shouldn’t be taken as a sign of an improving market, housing experts said.

Compared with the same month a year ago, foreclosure activity plunged in Alameda County by 27.7 percent, in Contra Costa County by 19.9 percent, in Solano County by 32.9 percent and in San Joaquin County by 32.9 percent, RealtyTrac reported.

“This slowdown continues to be largely the result of massive delays in processing foreclosures rather than the result of a housing recovery that is lifting people out of foreclosure,” said James Saccacio, chief executive officer of RealtyTrac.

In the Bay Area, total foreclosure activity plunged in April by 20.5 percent compared with the same month a year ago. Compared with March of this year, Bay Area foreclosures declined 19.3 percent, RealtyTrac said. The report defines foreclosure activity as the combined totals of notices of default, notices of trustees sale and repossessions by lenders, different stages in the foreclosure process.

Other experts agree that the lull isn’t a case of a thaw in the chilly housing market.

“It’s more a bureaucratic and paperwork slowdown,” said John Holmgren, manager of the Oakland office of Holmgren Associates/Opes Advisors. “A lot of lenders have slowed things down after the controversy over how foreclosures were being handled,” referring to the

so-called robo-signing scandals in which banks failed to follow the rules for processing foreclosure paperwork.

During the January-March quarter of this year, a foreclosure was taking a nationwide average of 400 days to complete. That was up from 340 days in the first quarter of 2010. In the first quarter of 2007, the average processing time was 151 days.

Still, the present lull could be temporary, RealtyTrac warned.

“The foreclosures won’t all flood the market at one time,” Blomquist said. “We do expect a gradual increase in foreclosures in the next few months.”

Santa Clara County foreclosures fell 13.8 percent, San Mateo County was down 28.1 percent compared to April 2010. Foreclosure activity fell 1.1 percent in San Francisco and rose 1.9 percent in Marin County, RealtyTrac reported.

“Unfortunately, most of the forecasts from the real estate associations suggest that the foreclosure problem is expected to continue for a pretty lengthy period,” Holmgren said.

That could keep a lid on any improvement in home prices.

“We won’t see any advance in values until it’s clear that the foreclosure situation has bottomed out,” Holmgren said.

Even worse, if the current slowdown in foreclosures is the result of paperwork issues, that may dash hopes of a housing market rebound.

Ultimately, new owners will be needed to buy homes with delinquent or failed loans.

“The market has to really absorb all of these distressed properties one way or another,” RealtyTrac’s Blomquist said. “Until they are gone, they will continue to weigh down the market and keep housing from truly recovering.”

Contact George Avalos at 925-977-8477. Follow him at Twitter.com/george_avalos.

Foreclosures decline
Foreclosure activity dwindled in the Bay Area during April compared to April 2010 and March 2011.

Area All foreclosures * % change, one year % change, one month
Bay Area 10,629 -20.5 -19.3
Alameda County 2,422 -27.7 -28.9
Contra Costa County 2,624 -19.9 -15.0
Marin County 209 +1.9 -20.5
Napa County 214 -11.7 -6.0
San Francisco 469 -1.1 +6.2
San Mateo County 814 -28.1 -9.3
Santa Clara County 1,798 -13.8 -22.0
Solano County 1,288 -32.9 -31.6
Sonoma County 791 -7.1 +0.3
San Joaquin 2,111 -21.2 +2.0
California 55,869 -19.9 -7.3
* Combination of notices of default, notices of trustee’s sale, and final foreclosure
Source: RealtyTrac

Article source: http://www.mercurynews.com/breaking-news/ci_18043751