Foreclosure activity slowed markedly in Sonoma County at the end of last year, but experts expressed skepticism that the decline signals a reduction in distressed properties.
The county recorded 443 homes lost to foreclosure in the fourth quarter of 2010, according to a report released Tuesday by DataQuick Information Systems of San Diego. Those filings, known as trustees deeds, declined 18 percent compared to both the previous quarter and to the last three months of 2009.
Another indicator, the filing of notices of default, declined 7 percent from the third quarter. The notices, the first official signal that a home is at risk of foreclosure, fell 23 percent for all of 2010 compared to the previous year. At the state level, notices of default fell in the fourth quarter to the lowest level in more than three years.
“We don’t know how much of the decline is due to less household financial distress, and how much is due to shifts in lender and servicer foreclosure policies,” DataQuick President John Walsh said in a statement.
Other analysts and real estate agents were even more doubtful that the foreclosure problem is getting better.
“Foreclosure levels are at historic lows compared to the number of people not making payments,” said Sean O’Toole, founder and CEO of ForeclosureRadar in Discovery Bay.
In the fourth quarter, Bank of America greatly slowed foreclosure sales in order to respond to legal questions raised nationally in regard to bank dealings with delinquent homeowners, O’Toole said. The quarterly drop in foreclosure activity may be due more to such actions by lenders, as well as to government efforts to keep people in their homes.
For 2010, the county recorded 1,965 trustees deeds, compared to 2,025 a year earlier. The record for such filings was 2,820 in 2008. In the fourth quarter, the county recorded 884 notices of defaults, the lowest number in a year.
For 2010, the default notices totaled 3,696, compared to 4,771 for the previous year.
Agents who specialize in reselling foreclosure properties took little encouragement from the new data.
“I don’t think the problem is much different than what it was two years ago,” said Doug Solwick, a broker associate with Keller Williams in Santa Rosa.
John Binns, an agent with Creative Property Services in Santa Rosa, said the nation remains “in the aftermath of the bubble bursting” for the housing market. He said it could take years to deal with all the financially troubled homeowners, and the government efforts may delay rather than hasten a rebound in home prices.
For California, trustees deeds totaled 35,431 in the fourth quarter. That compares with 45,377 for the prior quarter and 51,060 for a year earlier. The record was 79,511 filed in the third quarter of 2008.
The state’s median time for lenders filing a notice of default was six months after the first late house payment. The borrowers owed a median $16,368 on a $325,775 mortgage.
DataQuick estimated that 22 percent of the foreclosed properties offered at auctions last quarter were bought by investors.
Last month the information company CoreLogic reported that nearly 23 percent of all U.S. homes with mortgages are underwater, meaning they owe more than the homes are worth.
Mike Kelly, an agent with Keller Williams in Santa Rosa, said the answer for such homeowners is to have home values appreciate through a rebound in the housing market. For that to happen, he said, “you’ve got to get people working again.”