Southern California foreclosures decline at end of 2010

This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.

Southern California’s foreclosure crisis eased during the final three months of the year, according to data released Tuesday, but the Golden State’s high jobless rate could cause further defaults and repossessions this year.

The number of homes entering the formal foreclosure process in the Southland declined 16.6% in the fourth quarter of 2010 compared with the prior quarter and 19.7% with the same period a year prior. A total of 37,592 received notices of default in the six-county region, the first stage of the foreclosure process according to San Diego research firm MDA DataQuick.

The data captured a period in which the state’s largest lender, Bank of America, had declared a moratorium in the state in response to a national furor surrounding foreclosure paperwork issues. The bank lifted that freeze in December.

“On the surface it looks like good news, but we know there was this foreclosure freeze that the banks were caught in because of some shenanigans,” said Gerd-Ulf Krueger, principal economist with HousingEcon.com. “Foreclosures could pick up again.”

The number of bank repossessions in Southern California also declined by 22.5% from the previous quarter and 34.4% from the same period a year prior. A total of 17,567 homes were sold in foreclosure auctions during the final three months of 2010.

Statewide, 69,799 notices of default were recorded, a 16.2% decline from the prior quarter and a 17.5% drop from the fourth quarter 2009. A total of 35,431 homes were taken back by lenders statewide, a 21.9% decline from the prior quarter and a 30.6% drop from the fourth quarter of 2009.

-- Alejandro Lazo