Thursday, June 18, 2009

ForeclosureRadar: Lenders Still Delaying Day of Reckoning

ForeclosureRadar reports Despite Increases, Lenders Voluntarily Delaying 73 Percent of Scheduled Foreclosures

Discovery Bay, CA, June 16, 2009 – ForeclosureRadar (www.foreclosureradar.com), the only website that tracks every California foreclosure, and provides daily auction updates, issued its monthly California Foreclosure Report for May 2009. Foreclosures sales jumped 31.9 percent in May, following a 35 percent increase the prior month. Notices of Trustee Sale, which set the auction date and time, also rose a significant 42 percent from April, indicating that foreclosure sales are likely to continue to rise in
the weeks and months ahead. Despite these increases, and a record number of foreclosures scheduled for auction, lenders continue to voluntarily postpone the majority of foreclosure sales.

“While many complain that lenders are foreclosing too aggressively, and others claim a wave of foreclosures sales is imminent, the data actually shows that lenders are doing everything possible to delay foreclosure,” says Sean O’Toole, founder and CEO of ForeclosureRadar. “The reality is that we have very few homeowners being foreclosed on when viewed as a percentage of those scheduled to be foreclosed on, in default, delinquent, or upside down in their mortgage.”

As the only service that tracks every foreclosure auction throughout the state, ForeclosureRadar is uniquely able to see not only how many foreclosures were initiated, but also the current status of those foreclosures and their ultimate outcomes, whether postponed, cancelled or sold. By the end of May we had a record 111,824 foreclosures scheduled for sale, yet just 15.9 percent were actually sold, versus
49.2 percent of scheduled foreclosures being sold a year earlier. Further, when sales peaked in July 2008 at levels 61 percent higher than those reached in May 2009, there were only 64,598 foreclosures scheduled for sale, 42.2 percent fewer than today.

Of those foreclosures currently scheduled, 40 percent are being postponed to a future date at the lenders request, and another 33 percent are being postponed based on the mutual agreement of lender and borrower, clearly demonstrating that lenders are indeed delaying foreclosure in the majority of cases on their own accord. Specifically note that lenders were under no obligation in May to offer a loan modification program, short sale, or other resolution, and that these efforts would have resulted in a cancellation of the sale rather than a postponement. May saw just 6 percent of scheduled foreclosures
cancelled, the lowest percentage of cancellations we have on record.

May 2009 CA Foreclosure Report2 copy

My Thoughts: The backlog of foreclosures continues to grow. This is more proof.