In the News

The number of foreclosures canceled by banks surged 62% across California last month, the same month major mortgage servicers were required to comply with new rules outlined by this year’s National Mortgage Settlement.

Banks in the Golden State canceled 15,539 scheduled auctions last month, according to a report by website ForeclosureRadar.com. That was a 36.7% drop from the same month last year.

A separate report from ForeclosureRadar^® showed foreclosure cancellations were up 62.1 percent from September to October in California. ForeclosureRadar^® attributed the growing number of foreclosure cancellations in California to the state’s Homeowner Bill of Rights, which prohibits practices such as “dual-tracking” and goes into effect January 1, 2013.

With a tough Homeowner Bill of Rights set to take effect in California New Year’s Day, cancellations of foreclosure auctions have spiked in the Bay Area and throughout the state, according to a report Tuesday.

ForeclosureRadar^® said cancellations jumped 60 percent in California from September to October, the biggest jump since it began tracking cancellations in 2006. Similar leaps in the number of cancellations were seen in the Bay Area.

Foreclosure filings in Nevada plunged in October during the first month of a new state law stiffening foreclosure-processing requirements.

Slightly more than 600 default notices were filed against homeowners through Oct. 25 in the state’s two most-populous counties, Las Vegas’s Clark County and Reno’s Washoe County. That was down from 5,360 in September, or an 88% drop, according to data tracked by ForeclosureRadar.com, a real-estate website that tracks such filings. Default notices represent the first step in processing foreclosures.

Nevada’s state Assembly passed a measure that took effect on October 1, designed to crack down on “robo-signing,” where bank employees signed off on huge numbers of legal filings while falsely claiming to have personally reviewed each case. Banks suspended their foreclosure filings one year ago and have gradually restarted them after those and other improper foreclosure-processing practices surfaced.

Sean O’Toole likes to talk about foreclosure “myths.”

The founder of ForeclosureRadar^®, which tracks default trends, appeared before the Sacramento Association of Realtors^® on Tuesday and offered what he called a contrarian view of the housing crisis. The first myth: “Foreclosures are evil.”

Not true, O’Toole said. Foreclosures did not cause prices to fall. They don’t cause neighborhood blight, and there is not going to be a tsunami of new foreclosures in 2013.

Foreclosure starts fell dramatically in all five West Coast states tracked by ForeclosureRadar^®, confirming suspicions that a foreclosure wave may not arrive.

In September, foreclosure starts in Nevada fell 40.1 percent from the prior month and in Oregon, foreclosure starts fell 40 percent during the same period, according to a ForeclosureRadar report released Wednesday.

ForeclosureRadar^® released its Foreclosure Report for August on Monday, revealing that foreclosure starts fell dramatically during the month.

While foreclosure sales increased 23.7 percent month-over-month in California, the increased number of business days helped flatten the daily average increase to 2.2 percent over July.

Foreclosure sales dropped dramatically in three states last month, suggesting some state legislation is stalling the natural cycle of the market, ForeclosureRadar^® said Thursday. 

The new Homeowner Bill of Rights in California is expected to have a huge impact on housing supply in the state, the research firm said. 

“California Gov. Jerry Brown signed into law the Homeowner Bill of Rights, an anti-foreclosure package which naively thinks that slowing foreclosures will benefit homeowners and the economy by leaving those owners stuck in their prison of debt,” said Sean O’Toole, founder and CEO of ForeclosureRadar^®.

“We’ve long said negative equity, not foreclosures, (is) the problem,” O’Toole said. “Fortunately this bill was watered down significantly from its original form, so we don’t expect it will have the same impact that we’ve seen from more aggressive legislation in Nevada.”

O’Toole said that foreclosures in California “have already plummeted, and that the real housing crisis in now a lack of homes available for sale.”

The housing market’s long, cold winter may finally be heading into a springtime thaw.

New data show price declines easing in big cities, sales of new homes improving nationally and foreclosures in California dropping to levels not seen since before the start of the credit crunch nearly five years ago.

“The foreclosure market is turning into a drought, not a wave, and that has resulted in a lack of inventory,” said Sean O’Toole, chief executive of the firm ForeclosureRadar.com. “If it continues, it will likely mean that we’ve either seen a bottom — or have passed a bottom — in prices because of limited supply and still strong demand.”

Foreclosure filings and sales declined dramatically in several Western states, especially Nevada, according to data from ForeclosureRadar that shows foreclosure sales down in February.

“Passing laws to essentially eliminate foreclosures, as they appear to have accomplished in Nevada, and are now contemplating with similar draconian measures in California, is likely to do more harm then good,” said Sean O’Toole, founder and CEO of ForeclosureRadar. “The pendulum of regulation is once again swinging too far.”