Santa Barbara County Foreclosure Update

In looking over the numbers reported by the County for Notices of Defaults, Notice of Trustees Sale, and Trustees Deeds for March, there are some real concerns.

The number of Notices of Defaults that were recorded rose significantly and is a record number. There were 414 recorded in March. This is my biggest concern since it is a leading indicator of things to come.

The number of Notice of Trustees Sale documents that were recorded was 203. This is the highest number dating back to August of 2008 which was 276. I can only think that the banks will again be receiving a number of properties back soon.

March's Trustees Deeds that were recorded totalled 86. That number is actually a bit lower than previous months. This of course would be the last number affected by the foreclosure process and I would expect it to rise.

In looking at these numbers, the number of notices of defaults rising sharply could certainly be a sign of more foreclosures to come. Some people that I have spoken to are wondering if people are allowing their properties to go in to foreclosure so they can take advantage of the benefits of modifying their loan.

Time will tell if this increase in the number of notices of defaults is going to impact the number of bank owned properties in the upcoming months. I do think it is a little bit of wishful thinking to think that people are going in to foreclosure to take advantage of getting their loan modified, but it could be part of the equation.