Wednesday, July 21, 2010

California Mortgage Defaults Fall to 3-Year Low

DQNews -- "The number of California homes pushed into the formal foreclosure process between April and June dropped for the fifth consecutive quarter to the lowest level in three years. The declines were greatest in the most affordable areas, where foreclosure activity continues to fall from extremely high levels over the past two years.  Highlights include:

1. A total of 70,051 Notices of Default (NODs) were filed at county recorder offices during the April-to-June period. That was down 13.6% from 81,054 for the prior quarter, and down 43.8% from 124,562 in second-quarter 2009. 

2. Last quarter's total was the lowest since the second-quarter of 2007, when 53,943 NODs were recorded. The peak was in first-quarter 2009 when 135,431 homeowners received foreclosure notices.

3. Foreclosure resales accounted for 36% of all California resale activity last quarter. It was down from a revised 42.5% the prior quarter, and down from 49.9% a year ago. The peak was 57.8 percent in first-quarter 2009."
 
MP: This news about California defaults falling to a three-year low, and to a level in 2010:Q2 of about half of the level in 2009:Q1, suggests that the real estate problems in California and other markets are "slowly fading," and confirms some commentary about the economy in general from Scott Grannis, who writes today that:
 
"The economy's problems are slowly fading.....   Jobs are now being created, albeit slowly, but they are no longer being destroyed. Those who are working are doing just fine, as productivity has been quite healthy. Much of the world is doing pretty well, and some places, like China and India, are growing like weeds. Commodity prices show no sign of flagging demand. The yield curve is very steep, and that makes it easy for bank profits to mushroom; plus, a steep yield curve has been a very reliable predictor of recoveries."

4 Comments:

At 7/21/2010 5:24 PM, Blogger Jason said...

Slowly is the operative word. The long term unemployment picture will be ugly for some time to come.

I just continue to hope for real stimulus in the form of business tax and regulatory reform. That would go a long way to help build on the economic momentum.

 
At 7/21/2010 8:09 PM, Blogger Dr William J McKibbin said...

The foreclosure news from Califronia appears to be good, yes. However, the evidence does not support my becoming optimistic just yet. I am concerned about where California is going with the state budget -- will California balance their budget, or will California default -- clearly, California is a test case for Federal patience as the potential for default draws nearer with time...

 
At 7/22/2010 8:28 AM, Blogger juandos said...

"I just continue to hope for real stimulus in the form of business tax and regulatory reform"...

Well maybe, just maybe jason that might happen...

From the WSJ: Two more Senate Democrats called for extending tax cuts for all earners—including those with the highest incomes—in what appears to be a breakdown of the party's consensus on the how to handle the expiration of Bush-era tax cuts...

Still this Obama administration and their fellow travelers continue to exhibit a tone deafness regarding the private sector: White House Backs Bill to Collect Employee Pay Information from Businesses

 
At 7/22/2010 1:37 PM, Blogger VangelV said...

This news about California defaults falling to a three-year low, and to a level in 2010:Q2 of about half of the level in 2009:Q1, suggests that the real estate problems in California and other markets are "slowly fading,"....

Does it confirm that the real estate problems are 'slowly fading'? Sorry Mark but it is one thing to have the number of homes, pushed into the formal foreclosure process decline and another for the crisis to be over. It makes more sense to see how people are able to keep up with their mortgage payments instead. Are California mortgages 90 days past due falling or rising? What about pending sales? Inventory levels? Employment and taxe trends in California? Etc. Etc. Etc. Here are a few contrary indicators.

http://tinyurl.com/387gtvk

http://tinyurl.com/34b33vr

http://tinyurl.com/2uchoaj

http://tinyurl.com/33gq8yp

http://tinyurl.com/2ub54r3

From what I can see California housing still has a long way to go and will fall in real terms for a number of years. As I have written before, I would rather own gold and silver than California housing.

 

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