Santa Barbara Foreclosures For June

Before I get in to my comments about foreclosures in Santa Barbara, I would like to say we were pretty busy folks in June. Closing a number of sales as well as processing quite a few refinance escrows. Many of the people I speak with seem to have a little better outlook on real estate in our fair county.

Enough of my observations for now!

As you all are probably aware of by now the foreclosure process starts with the recordation of the notice of default. In Santa Barbara County we have been experiencing a record number of them being recorded. Our all time high was 414 in February and since then we have fallen off of that a bit, and June was 332. It would appear to me that we are going to bounce around the 300 number for a while.

If you want to watch this number day by day you can do so at the county website, which updates their information between 4 and 5 each day. Got that straight from the webmaster.

The next step in the process is the recording of the notice of trustee sale. June was 232 which is down a bit from the high of May, 273. No big surprises there since the NOD's reached 414 about 90 days ago. That is about the time frame you might expect the notice of sale to appear.

The last step in the process is when the bank takes back these properties, and that is when the Trustee's Deed gets recorded. June was at 145 which isn't even close to the highs of July, August, and September of last year.

All in all, it appears to be kinda the same ole same ole when it comes to how many foreclosures are showing up. The only thing that I'm not sure of is if these numbers are being affected by some of the loan modification programs that are in place. It would appear that a smaller percentage of properties are going back to the banks, but I will be more comfortable saying that with a few more months of numbers.

Enjoy your July 4th Weekend!

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.

What Do All These Foreclosure Numbers Mean Anyway?

Following all the related foreclosure numbers like I have been for the last 2 years certainly doesn't make me any expert. It really helps me to see what is happening when I can view a chart allowing me to view trends one way or the other.

The numbers for July in Santa Barbara County are intriguing to say the least. I know real estate is a very local commodity when all I read in the headlines these days is how Notice of Defaults are continuing to rise and Santa Barbara appears to be bucking the trend.

Santa Barbara County had a significant drop in the number of Notice of Defaults the County Recorder reported for July. An 18% drop causes me to think that if that keeps up this will be fantastic for the Santa Barbara Real Estate Market. So, will it?

That is the 64 million dollar question! Here are the facts, the number of Trustees Deeds have been on the rise, the number of REO's selling have been on the rise, and the number of loans adjusting have also been on the rise.

I believe the leading indicator has to be The Notice of Defaults recording. That starts the entire process of foreclosure. If they continue to decrease then so will everything else mentioned above.

I know this may be an optimistic viewpoint, but maybe just maybe all the effort being put in to keeping people out of foreclosure is beginning to work. I can tell you that the number of loans adjusting in November and December of this year is 160 and 123 respectively. That is a lot lower number than in 2007. That would appear to bode well when it comes to seeing the Notice of Default number declining.

The more I look at this chart and the numbers I've been tracking, the more I am beginning to believe the claims that we are seeing or have seen the worst of the foreclosures in Santa Barbara County.

I did hear a report today that the number of homes sold across the country increased over 3% from June. Maybe this is the start of some positive news on the real estate front.

Santa Barbara Foreclosure Trends

I know this is going to come off as some kind of understatement, but I'll write it anyway. "This is a very interesting Real Estate Market!"

Updating the numbers for the Foreclosures Trends is just like updating any of the other numbers I look at each month, Crazy!

If you remember when I first started this chart it was a little void of much historical data for the number of loans that are adjusting here in Santa Barbara County. As you can see we are starting to see a trend there.

The number is down to 41 in February. I can tell you the number will go up to the 180 mark as soon as May, so don't think we have seen the end of that.

You can also see from the chart that the number of Notice of Defaults that are recorded seems to have plateaued in the 280 range for the last couple of months.

This in turn affects the number of properties going back to the banks reflected in the number of Trustees Deeds being recorded. February had 95 of those record down from 98 in January. This will cause the number of bank owned listings to increase in the coming months.

The number of Bank owned Properties that sold in February rose to 24. This is a relatively good sized increase over the 17 in January and December that were recorded. I would expect to see this number be pretty consistent over the next few months. It may rise some as well since the number of Trustees Deeds has been pretty high for the last couple of months.

I think the key is going to be what is happening with the number of Notice of Defaults recorded in the coming months. If that number grows even though the number of loans adjusting has decreased then we can guess that those loans aren't as big a problem as once thought.

See You In Escrow!

Santa Barbara Foreclosure Info Jan 2008

The Santa Barbara Foreclosure Chart is showing some interesting changes now that we have a few months of data to compare.

The piece of the process that starts everything else is the recording of the Notice of Default. In January in Santa Barbara County there were 284 recorded, which is the largest number since the mortgage meltdown began.

The next step in the process is the recording of a Trustees Deed. For January there were 98 recorded. This is also the largest number we've seen. This is the number that leads to all the Bank owned properties for sale.

The Bank owned properties or more commonly referred to as REO's that sold in January stayed at the same number we saw in the previous 2 months, 17.

The last, but probably not least line on the chart is the number reflecting how many loans are being adjusted in a given month. You could argue that this is the number that starts all the others moving, but I haven't figured out if there is a direct relationship yet, so I'm holding out. This number for January was 139.

As you can see from the graph the number of loans that adjusted in January is down significantly, but will be climbing in April and May back to the 180 level. This coupled with the rise in the number of Notice of Defaults and Trustees Deeds makes me think we are seeing the worst of this.

I do expect a rise in the number of foreclosed properties being sold based on what we've seen the last 12 months. The number of sales occurring seems to be about 25% of the number of Trustees deeds we record, so with that in mind we may be seeing about 25 bank owned properties closing escrow in a given month in the not too distant future.

I think we are seeing the worst of it, knowing what I know about the number of loans that are going to adjust in the next 6 months. I also think there will be some positive impact on the market with respects to the stimulus package that is being implemented.

So all that is left to say is, See You In Escrow!