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Foreclosure rates keep the real estate seas rough

On Behalf of | Jul 26, 2022 | Real Estate Law |

Foreclosure rates continue to increase despite fluctuations in the real estate market nationwide. The most important metrics -– year-to-year increase and median home prices –- continue upward, a trend that has lasted more than a year. More than 30,000 properties began foreclosure filings in May 2022. While government programs have prevented unnecessary defaults, persistent inflation could generate more foreclosure activity.

Geography contributes most significantly to two separate data fields: the total number of foreclosures and the foreclosure rate, or the number of foreclosure filings per housing unit.

Overall, California had the 17th highest foreclosure rate. Slightly more than 3,000 housing units of the state’s 14 million went into foreclosure. The top five counties with the included the less populated counties in the northern California of Lake, Trinity, and Plumas, and densely populated southern counties, namely Kern and San Bernardino.

Foreclosure process in California

Lenders in California most often employ a non-judicial foreclosure to force the sale of the home to pay any outstanding mortgage debt. The multi-step process includes notice to anyone on the mortgage loan, a Notice of Default and a Notice of Sale. Up to five days before the foreclosure sale, the debtor can stop the process through reinstatement of the loan. Any person or institution during the 21-day period prior to the Notice of Sale can pay the loan in full.

Financial investments in real estate remain subject to economic influences well beyond the control of all parties to a sale. Lenders seek to recoup their loans; sellers hope to break even or gain; buyers want a home that represents the best overall value. Foreclosures interrupt these interests and can have significant consequences. Attorneys who understand real estate transactions and their consequences can offer guidance.