For the month of May the banks seized 591 houses and condos in Orange County which is a 22.6% increase from April but at 47.7% decrease from May of 2008. 
As the chart shows, foreclosures begin to fall after a state law was enacted in September requiring lenders to talk to borrowers about methods to avoid foreclosure at least 30 days before filing a notice of default. Many people believe that the law only delayed foreclosures. The new moratorium that was enacted allows loan servicers to apply for an exemption to the moratorium by showing they are already doing loan modifications.
With the economy in turmoil more banks are doing loan modifications which could explain why foreclosures remain below the peak level of 2008, when banks were seizing more than 1,000 homes per month throughout the county. Unfortunately the data also shows that borrowers are re-defaulting more than half the time after getting a modification.
When the September law was enacted the number of default notices decreased but they have since rebounded. Last month banks filed 2,590 notices of default which is down 12.1% from April but up 4.9% from a year ago.
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