California Foreclosure Filings Slow Down in September

According to September 2008 California Foreclosure Report released by ForeclosureRadar.com, the notice of defaults (NODs) fell 61.8 percent in September due to new legislation that went into effect on September 8th.  The report says the drop in foreclosure filings was due to the California State Senate Bill 1137 which requires lender to contact default homeowners to explore options for avoiding foreclosure on their primary residences at least 30 days prior to filing a notice of default.

The bill specifically encourages loan modifications as an alternative to foreclosure.  Although, the state cannot force lenders to modify an existing loan.

Other findings by ForeclosureRadar:

1. Only 16,352 NODs were filed in September down from the 42,790 in August, a decrease of 61.8 percent from August 2008 and a decrease of 36.4 percent from a year earlier.
2. Notices of Trustee Sale filings decreased 47.3 percent from August to a total of 19,116 filings.
3. Properties taken to sale at auction increased 163.2 percent from the prior year to 23,409 sales with a combined loan balance of $9.75 billion.  This represent at 12.4 percent drop from August 2008.
4. Lenders took back 95 percent of the properties taken to auction with a combined loan value of $9.19 Billion.  Third party purchases were flat from the prior month, but increased slightly as a percentage due to a decline in sales.