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Foreclosures triple in state

August 17, 2008|Peter Viles

Banks and lenders have now foreclosed on $100 billion worth of California homes over the last two years and are foreclosing at the rate of 1,300 houses every business day, according to a new report from ForeclosureRadar.com.

The report, which covers foreclosure activity in California in July, says that new mortgage defaults are declining but foreclosures are continuing to rise sharply. "It is clear that far fewer homeowners are finding a way out of foreclosure," the company reports.

The pace of foreclosures in California has more than tripled from the year-ago rate of 415 per day, ForeclosureRadar estimates. Overall, the level of foreclosures in the state increased 22.5% from June to July, while the level of defaults dropped by 4.6% in the same period. The vast majority of foreclosed homes are taken over by banks -- 96.6% in July, the company reports, although it notes that banks are increasingly offering discounts to investors in hopes of avoiding taking possession of foreclosed houses in the first place.

"Although the declines in notices of defaults seem promising, much of this can be explained by the actions of just one lender," said Sean O'Toole, founder of ForeclosureRadar. "Ninety-one percent of the decline in notices of default since April can be attributed to Countrywide Financial. Unfortunately, this is more likely due to the challenges of integrating two companies the size of Countrywide Financial and Bank of America than it is a fundamental shift in foreclosure activity."

-- Peter Viles

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