Banks in California had a new requirement put on them before they could record a notice of default. They had an extra step or two added to their process. Making an extra effort to contact any borrowers that were in default before recording the notice of default slowed up that process and we experienced the slowing of those recordings as was obvious during those months.
It is also why I believe the December and January numbers are a little inflated.
If you use that information to adjust the number of notices of defaults filed in December I think that number should be much less than the number in December of 2007. January 2009 is already lower than January 2008, but it would be an even larger seperation after adjusting the numbers.
The other 2 categories that are being tracked on this chart are also showing a softening of the foreclosure market here in Santa Barbara. Could that be due to the same issue the banks faced regarding contacting the borrowers that were in default, possibly.
There has been quite a bit of talk recently about loans that are scheduled to adjust this year and how that is going to cause the foreclosures to increase again. I'm not so sure that we are going to see the impact some people are expecting. With the surge in refinancing and the banks learning how to handle loan modifications many of these loans that are expected to recast may be off the books.
Time will tell though. Stay tuned!
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