California Foreclosure Activity is Rising
Dataquick just reported that foreclosure activity is rising in California. The timing of this article is a bit ironic since I recently mentioned to my colleague (And soon to be MyEastBayAgent contributor) Norman Gee that I noticed that there was a definite upward swing in the volume of Notice of Defaults.
Lending institutions sent 14,999 default notices to California homeowners during the October-to-December period. That was up 19.0 percent from 12,606 for the third quarter, and up 15.6 percent from 12,978 for 2004's fourth quarter, according to DataQuick Information Systems.
"There's always going to be a certain amount of financial distress. People lose their jobs, have medical emergencies, get divorced, pass away or make bad money decisions at a certain rate. Because of the rise in home values, much of that financial distress has been covered by the increasing amount of equity that people have had in their homes. That equity is now being created at a slower pace, and default activity is inevitably on the rise," said Marshall Prentice, DataQuick president.
When a notice of default is filed, that means that the lender has started the legal process of foreclosure. We recently started a program to contact owners in default to see if we can structure win-win situations.
As soon as a Notice of Default is filed, the race is on and soon there are all types of people trying to contact the homeowners to offer to solve their problems. Whomever contacts the homeonwer and gains their trust first is often the person they trust to rectify the situation.
Some are trustworthy, some are scam artists, some are licensed, and some aren't. Just because someone is licensed doesn't necessarily mean that they're trustworthy.
Since we're trustworthy and licensed, we feel that we can offer some additional options that an unlicensed investor can't.
After examining their situation, we present them with some options. If they decide that they want to try to keep the property, we'll go over the options for them to attempt to do so. Sometimes it just doesn't make sense to hold onto the property any longer. If that's the case, together we'll sit down and decide on the best course of action.
We'll let you know how it goes.
Flickr photocredit karmablue. Used under a creative commons license.