In February, more than 5,800 California properties received a notice of default – the first stage of the foreclosure process. That was down 9.24 percent from January and a 2.99% dip from a year ago; a big reversal from January when annual foreclosure starts spiked by nearly 60 percent.
“Maybe the January numbers were just a one month anomaly, the verdict’s still out on that," says Daren Blomquist with RealtyTrac, the research firm that released the data.
He says lenders could also still be adjusting to California’s strict Homeowner Bill of Rights which took effect one year ago. “February was down," says Blomquist, "but I think we will continue to see some months where the numbers are jumping up from a year ago as lenders figure out how to foreclose properly given the Homeowner Bill of Rights.”
RealtyTrac also took stock of California’s owner-vacated foreclosures, also known as “zombie foreclosures.” In February, it was one-in-every 10 homes in the foreclosure process. Much lower than the national average of one-in-five.
Blomquist says the average length of time an owner-vacated foreclosure stays empty in California is just over 1,000 days.
“Which was really eye-opening; these are properties that have been sitting there in some cases for close to three years. That’s an issue that is: 1) dragging down the values of the surrounding properties; 2) it is somewhat artificially holding back inventory from the market that would otherwise be there.”
California now has the 11th highest foreclosure rate in the country.