Despite the news from some quarters that delinquency rates may be starting to slow down, California is initiating more notices of default starting in February than in previous months. NODs jumped by 19.7% in February after a four month decline. While properties scheduled for foreclosure continued at a record pace, actual sales back to the bank or to third parties declined in February in California by 11.9%, according to a tracking site, ForeclosureRadar.
The editors of ForeclosureRadar blame government efforts to increase fairness and oversight of the process without really curing the problem of under water mortgages. ForeclosureRadar said that despite the increase in the number of permanent loan modifications there has not been a decrease in the number of foreclosures headed toward sale. They expected to see a wave of foreclosure cancellations as a result of the modifications, but, statistically speaking, that did not happen. The number of filings leaving the foreclosure process was nearly even with the number of new notices of trustee sale in California during February. Discounts for properties sold at auction fell from 17.5% in January to 15.2% below market value in February.
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