You might be surprised to learn that the California foreclosure rate actually decreased by 18% in October compared to September, according to RealtyTrac’s new report. But the news isn’t necessarily good.
The state’s filings have dropped for two straight months because of a new law that requires lenders to make a number of attempts to contact homeowners and then wait 30 days before issuing default notices. This has slowed down the number of foreclosures and will likely just delay the inevitable.
Despite the drop in the California rate, foreclosures nationwide increased 5% from the previous month and 25% from Oct. 2007, RealtyTrac said.
And the worst is likely on the way. Rick Sharga, RealtyTrac’s vice president of marketing, told me today that he expects a sharp increase in coming months as the economy worsens and more and more people lose jobs.
“Another wave right now is about to come, driven by the economic downturn,” Sharga said.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.