Foreclosure activity plunges in California with new laws in effect
New California foreclosure actions posted a sharp plunge in the first quarter to levels not seen since the last housing boom.
Lenders filed 18,567 mortgage default notices on California houses and condominiums during the first three months of the year. That was a 51.4% drop from the previous quarter and a 67.0% drop from the first quarter of 2012, according to real estate firm DataQuick.
The filing of a notice of default is the first step in California’s formal foreclosure process.
The firm reported the numbers Tuesday. It attributed the drop to rising home prices, a stronger economy and government interventions designed to curtail foreclosures.
In particular, a series of new laws backed by state Atty. Gen. Kamala D. Harris that place new regulations on foreclosure practices appears to have played a big role in the sharp reduction, DataQuick reported.
“It appears last quarter’s drop was especially sharp because of a package of new state foreclosure laws -- the ‘Homeowner Bill of Rights’ -- that took effect Jan. 1,” John Walsh, DataQuick president, said in a news release. “Default notices fell off a cliff in January, then edged up.”
Once lenders adjust to the new regulations, the numbers could pick up again, Walsh noted.
Default notices remained more prevalent in California’s cheaper neighborhoods, according to DataQuick. And most of the loans going into default were between 2005 and 2007.
Among the state’s biggest counties, loans were least likely to go into default in the affluent San Francisco, San Mateo, Santa Clara and Marin counties. Loans were most likely to go into default in the less-affluent Riverside, San Bernardino, Solano and San Joaquin counties.
The number of homes taken back by lenders through the foreclosure process also fell dramatically last quarter. The total number of trustees deeds filed on homes fell 35.7% from the previous quarter and 55.1% from the first quarter of 2012. A lender records a trustees deed on a property after it’s been foreclosed upon.
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