Foreclosures in Southern California hit their highest level in two years in January, according to new data out Thursday. But market-watchers say it’s more a matter of lenders clearing their books than a new wave of bad loans.
The number of homes repossessed by banks in Los Angeles County nearly tripled from December to the highest level since December 2012, according to data firm RealtyTrac. Similar patterns were seen in Orange, Riverside and San Bernardino counties.
Nationally, foreclosure activity grew 5% from December to January.
Banks are finally adjusting to California’s year-old Homeowners Bill of Rights, which offers new protections for mortgage holders and prolongs the foreclosure process, experts at RealtyTrac say. And that’s pushing a wave of repossessions through the pipeline right now. The number of notices of default - which start the foreclosure process - remains roughly at the level it’s been for the last six months.
“This is really a final push to clear the decks of a still disproportionate amount of distressed homes and finally bring the market back to more stability,” Mark Hughes, CEO at First Team Real Estate in Irvine, told RealtyTrac.
Even this new quicker pace of repossessions remains well behind the levels seen at the height of the foreclosure crisis. There were 1,231 homes taken by banks in Los Angeles County in January, according to RealtyTrac. That number peaked in February 2009 at 4,154.
Keep an eye on housing and real estate in Southern California. Follow me on Twitter at @bytimlogan