by Calculated Risk on 10/18/2011 02:50:00 PM

From DataQuick: California Foreclosure Activity Back Up

A total of 71,275 Notices of Default (NoDs) were recorded at county recorders offices during the third quarter. That was up 25.9 percent from 56,633 for the prior three months, and down 14.4 percent from 83,261 in third-quarter 2010, according to San Diego-based DataQuick.

Last quarter's 71,275 NoDs, which mark the first step in the formal foreclosure process, jumped back to levels seen earlier this year and late last year. Lenders filed 68,239 NoDs during first-quarter 2011 and 69,799 in fourth-quarter 2010. NoDs peaked in first-quarter 2009 at 135,431.
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"The way it looks right now, it's reasonable to expect default filings to run at a somewhat higher level than we saw earlier this year," [John Walsh, DataQuick president] said. "Obviously, some lenders and loan servicers have begun to plow through their backlogs of delinquent loans more aggressively."

Most of the loans going into default are still from the 2005-2007 period: the median origination quarter for defaulted loans is still third-quarter 2006. That has been the case for almost three years, indicating that weak underwriting standards peaked then.

Some of this increase was due to the surge in filings by BofA in August.

And on completed foreclosures:

Trustees Deeds recorded (TDs), or the actual loss of a home to foreclosure, totaled 38,895 during the third quarter. That was down 8.4 percent from 42,465 for the prior quarter, and down 14.3 percent from 45,377 for third-quarter 2010. The all-time peak was 79,511 in third-quarter 2008. The state's all-time low was 637 in the second quarter of 2005, DataQuick reported.
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On average, homes foreclosed on last quarter took 9.9 months to wind their way through the formal foreclosure process, beginning with an NoD. That's about even with 10 months in the prior quarter but up from 8.7 months a year earlier.

California is a non-judicial state, and it still takes an average of 10 months to foreclose after the Notice of Default is filed (the shortest possible period is 3 months and 21 days).

Click on graph for larger image in graph gallery.

This graph shows the annual Notices of Default (NODs) filed in California. The current year was estimated at the total for Q1 through Q3, plus Q4 the same as Q3.

California had a significant housing bust in the early '90s, with defaults peaking - and prices bottoming - in 1996. That bust was mild compared to the recent housing bust - and defaults are still way above the 1996 peak.