For the last three quarters, the number of homeowners receiving default notices has hovered around a level last seen eight years ago, according the the latest report from market tracker DataQuick.
Foreclosures, as well, are at pre-recession levels. It’s the housing market’s response to an improving economy and rising house and condo prices, the organization says.
It’s also become the double-edged blade of the current housing market.
If you are looking to buy something — especially that all-important first home — this is not great news because the market is no longer flush with bargains. But if you already have a mortgage, you feel more wealthy now than a couple of years ago because home values have been rising.
From January through March, lenders issued 19,215 default notices to property owners across the state, up 3.5 percent from 18,568 in the first three months of 2013, La Jolla-based DataQuick said.
Lenders issured 18,120 default notices in last year’s fourth quarter and 20,314 in the third quarter.
Meanwhile, the number of foreclosures plunged 43 percent, to 7,799 from 13.592 a year earlier.
The same picture emerged in Los Angeles County, where defaults rose 5 percent in the quarter, to 4,191 from 3,984 a year ago. Foreclosures fell 45 percent, to 1,212 from 2,217 a year ago.
Lenders have been steadily extricating themselves from the mess that resulted from all those goofy loans made in the middle of the last decade.
“It may well be that the foreclosure starts in recent quarters don’t reflect the ebb and flow of financial distress as much as they reflect a steady state of workload capacity on the part of the servicers. They may well be just working their way through a backlog, stacks of paper piled high on desks,” said DataQuick analyst John Karevoll.
In other word, foreclosure processors are still mostly plowing through that pool of toxic subprime mortgages originated back in mid to late 2006, products that eventually helped plunge the nation into the Great Recession.
Senior Director, Coldwell Banker New Homes Division
With over 200 condominium, townhome and loft projects successfully marketed
“Fewer properties for sale with such remarkably low interest rates make it a great time to sell but a more difficult time to buy”