Foreclosure listing service RealtyTrac says “notices of default,” the first stage of the foreclosure process, went up by just over 3% from April to May.
RealtyTrac’s Daren Blomquist says it was the fourth straight monthly increase. But Blomquist says it’s not a sign of any new problems in California’s housing market.
“This is just still cleaning up from the wreckage of the original housing bubble and there’s a lot less wreckage to cleanup but there is still some distress out there that needs to be worked through.”
Once a mainstay in the top five states with the highest foreclosure rates, California has dropped to 11th in the nation. Blomquist says about 17,000 properties got some typoe of foreclosure filing in May (notice of default, auction notice or bank repossession).
“…and that 17,000 was down 60% from a year ago which now continues a string of year-over-year decreases in California we’ve seen for the past 18-months.”
He says one reason foreclosure rates are down is that home values are up…helping homeowners on the edge of losing their property.
“If their home value is rising, that gives them another option to avoid foreclosure with a refinancing of that loan to get a lower payment or possibly selling the home.”
Stockton no longer tops the list of U.S. cities with the highest home foreclosure rates in the country. Blomquist says Modesto is also out of the top ten.
“Modesto is the highest at number 19 in terms of foreclosure rate. Foreclosure activity there is down 57% from a year ago. In Stockton, which for several months back in the worst of the housing crisis had the number one foreclosure rate in the nation, is down to number 40 now with a 66% decrease year-over-year in foreclosure activity.”
Meanwhile, Sacramento is ranked 52nd in the nation with a 62% drop in foreclosure activity from a year ago. Blomquist stresses – these are “overall” foreclosure numbers.
If you drill down and look at only the “notices of default,” the first stage of the foreclosure process, Blomquist says you’ll see a slow uptick in the numbers in each of those cities.
In Reno, there was a 300% increase in home foreclosure starts in May compared with a year-ago. May also marked the sixth-straight month of year-over-year increases in foreclosure starts.
“But that 300% increase is the biggest one we’ve seen.”
Blomquist says there were a total of 616 homes with a foreclosure filing last month.
“To put it in context, that 616 is still well below the peak in the foreclosure crisis in Reno. We saw at one point as high as about 2,100 properties a month with foreclosure filings.”
Blomquist says activity is bouncing back in states like Nevada where a foreclosure prevention law recently expired. Nevada now has the second highest foreclosure rate in the country. Florida has the highest.