Foreclosures unexpectedly fall in San Diego
While many were expecting a surge in foreclosures, giving a much-needed boost to the low inventory of homes for sale in San Diego, a recent report indicated otherwise. Real estate tracker DataQuick recently released a new report based on data from October, which revealed that mortgage defaults in San Diego County have now reached a six-year low.
Mortgage defaults are known to be the first step in the foreclosure process, so a decline in defaults correlates to less foreclosed homes and less homes re-entering the market for auction. Real estate journalist Lily Leung reported in the San Diego Union-Tribune that notices of default totaled 958 in October, with is 9 percent less than in September of 2012. Furthermore, notices of default in October were noted to be more than 50 percent less than in October of 2011. Leung detailed that October's total for notices of default is the lowest number since September 2006, when it was at 872.
Looking at foreclosures, the DataQuick numbers revealed that in San Diego County, foreclosure numbered 498 in October 2012. This is just one higher than the 497 recorded in September 2012. However, this is 25 percent less than the number of foreclosures observed in October 2011.
Compared to national trends, a recent report from the Mortgage Bankers Association (MBA) indicated that roughly 7.4 percent of mortgages across the country were delinquent by at least one payment at the end of quarter three this year. This is a decrease of 0.0018 percent from the second quarter of 2012 and a 0.0059 percent decrease from the third quarter of 2011. While these percentages may seem relatively insignificant, they are actually substantial as delinquent rates typically increase in the second and third quarter of every year.
"The 90 day delinquency rate is at its lowest level since 2008, and together with the decline in the percentage of loans in foreclosure, this indicated a significant drop in the shadow inventory of distressed loans - a real positive for the housing market," said Mike Fratantoni, MBA's vice president of research and economics, in a recent media statement, according to the source.
San Diego creates a foreclosure registry
The San Diego City Council voted this month to approve the creation of a foreclosure registry. The registry requires that banks log every home in the city of San Diego that is in the foreclosure process into a city-run database. It additionally requires banks to input contact information of responsible parties to help solve any issues that may arise with upkeep of properties or crime. According to the San Diego Union-Tribune, the measure's necessity was questioned because mortgage defaults have been continuing to decline.
Leung recently surveyed 10 real estate experts for their perspectives on the new registry. One industry expert, Murtaza Baxamusa, who directs planning and development for the Family Housing Corporation, shared a few interesting comments.
"At its peak, the foreclosure crisis cost the San Diego region more than $1.5 billion loss in gross metropolitan product, according to a study by the U.S. Conference of Mayors," Baxamusa stated. "Vacant and abandoned homes depressed property values in neighborhoods through the 'broken glass' effect and fiscally impacted the municipal tax-base. Displacement also exerted an economic, health and human toll on at-risk families. However, the foreclosure hurricane has passed us, with defaults falling to their lowest level since the turbulence of the great recession. It is time for rebuilding. The city needs to work with responsible financial institutions to reinvest in impacted communities."