Real estate roundup: Californians in foreclosure limbo

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A rising number of Californians are finding themselves in financial limbo, having defaulted on their mortgages but still living in their homes, a new report has found.

The report by Foreclosureradar.com (registration required) found that while the number of properties scheduled for foreclosure sale increased last month, lenders continue to postpone the sales rather than foreclose.

After three months of declines, the number of houses taken back by banks in October rose by 22.2% from September and 20.95% from October 2008. Despite that jump, the number of foreclosures remains 42.6% below a peak reached in July 2008, from which time the inventory of scheduled foreclosures has grown 131.36%, according to the report.

“While we continue to see a steady stream of properties entering foreclosure, relatively few are completing the process and being sold at auction,” Sean O’Toole, chief executive of ForeclosureRadar.com, said in a statement. “The bigger picture is that more and more homeowners are finding themselves upside down in foreclosure limbo, some hoping for a loan modification or short sale, while others are just waiting for a knock on the door.”

Of all postponements, 87% of them were made at the request or with the agreement of lenders, compared with 10% postponed due to bankruptcy. The majority of loans foreclosed upon in October 2009 were originally made between January 2005 and December 2007, according to the report.

In other news, the death of prominent attorney and developer Doug Ring may have resulted from an overdose of pills. Ring was found dead Thursday in his Brentwood home. Read more about it in our sister blog, L.A. Now.
-- Alejandro Lazo