Foreclosures Up, Defaults Down?

A look into what caused a 41.9% spike in foreclosures for the month of December and why are notices of default declining.
Should we expect to see many new forclosures on the market? No

In Case you missed it there was an article in the San Diego Union Tribune, written by Roger Showley which showed that foreclosures were up for the month of December while at the same time notice of defaults were down.
When I look at articles like this one I like to understand what causes these things to happen. I discussed this with a couple of my colegues, Pat Russiano and Terri Davids, both at Century 21 Award and what I’d like to beleive caused this the expiration of the moratorium back in November. For those of you not familiar with a moratorium, when backs received TARP funds or “the bail out” by the government, they were instructed to put a hold on foreclosures to prevent the economy from spiraling out of control and housing values from plumeting. It was a condition of the banks receiving those funds. This was lifted in November, which caused a back log of properties that would of been foreclosed otherwise in the past to come due now. That is where I attribute the 41% spike from November to December in foreclosures.
When we look at the notice of default side of it, this I think is an idication that banks are stepping up with their efforts to prevent this. They are losing money, which is the bottom line so to prevent this they are modifying loans and pushing more the short sales to be more succefull.
What this means for the consumer, on the buying side don’t expect to see very many foreclosures on the market as a result. Banks are hanging on, renting properties at times and they are selling them as blocks of properties to investors so don’t get your hopes up there.

About Daniel Di Matteo

Realtor at CENTURY 21 Award, Daniel was Voted U-T San Diego’s Best Real Estate Agent in 2014. A Husband, Father, and most recently, accomplished Blog writer, which explains your visit today.