Looks Like Rain in California: ForeclosureRadar

The overall forecast for the California housing market remains bleak. The clouds had yet to break in July, but look heavy with a record volume of foreclosure sales waiting to flood the market. The volume of foreclosures scheduled for sale in California reached a record high last month, according to ForeclosureRadar‘s July report, which tracks each California foreclosure. Notices of default remained flat and foreclosure sales dipped 22.7%, but notices of trustee sale jumped 31.6%. The image is of a steady march into the foreclosure process and a slowed trickle out of it, resulting in a backlog of scheduled sales in the month. The number of properties scheduled for foreclosure sale rose to a record high of 124,874 in July, nearly double the level seen during the foreclosure peak last year, according to ForeclosureRadar. Year-over-year, default filings are up 11.9%, notices of trustee sale rose 0.7% and foreclosure auction sales plummeted 40.1%. July 2009’s 17,239 foreclosure auction sales bore a combined loan value of $8.08bn. ForeclosureRadar also saw a record number of foreclosure cancellations — 10,789 — in the month, 24.8% more than June and 86.3% more than July 2008. The data provider noted, however, that as a percentage of foreclosures scheduled for sale, the rate of cancellation had changed little from previous months. “It is our understanding that foreclosures are not cancelled until the completion of [the Home Affordable Modification three-month] trial period,” ForeclosureRadar said. “As such, we believe monitoring the cancellation of scheduled foreclosures should provide some insight into the effectiveness of this program, as successful trials should result in cancelled foreclosures.” Write to Diana Golobay.