More Foreclosures Getting Cancelled

From ForeclosureRadar Foreclosure Cancellations Jump 40 Percent

Discovery Bay, CA, December 15, 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 November 2009. Despite apparent headline month-over-month declines in foreclosure activity, the real story requires looking at changes in the average daily activity. November had only 18 days on which filings could be recorded or trustee sales held because of fewer days in the month, Veterans Day and the Thanksgiving Holiday, while October had 22 recording days, and 21 trustee sale days. After adjusting for this difference in days we find little month-over-month change in the statistics, with the exception of Notices of Trustee Sale which declined 13.4 percent, Cancellations which rose 40.0 percent and Sales to 3rd Parties which rose 8.0 percent on a daily average basis.

“We’ve been waiting to see some impact from the Home Affordable Modification Program,” says Sean O’Toole, Founder and CEO of ForeclosureRadar.com. “The 40 percent increase in cancellations this month is likely just the beginning of what we expect will be a wave of cancellations under this program”.

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Perhaps most significant is the 40.0 percent month-over-month increase in daily average Cancellations when viewed on a daily average basis. This is especially notable as the Obama Administration announced a new campaign this month to convert trial loan modifications to permanent modifications. This is important because properties remain in foreclosure during the trial period, and are only cancelled once the modification becomes permanent. We’ve therefore been watching sales and cancellation closely looking for either a rise in foreclosure sales as modifications fail, or a rise in cancellations if they become permanent. This months rise in cancellations are in line with recent Administration reports that 31,382 of the 728.408 trial modifications became permanent. And given their new conversion drive, further cancellations are likely.

Despite the significant drop in filings of new Notices of Trustee Sale, and an increase in the number of Cancellations, the number of foreclosures Scheduled for Sale still rose. The simple reality is that homeowners are continuing to enter foreclosure faster than they are coming out. This will likely continue until we see meaningful progress on loan modifications, or the often predicted “foreclosure wave” finally occurs.