Foreclosure activity in California dropped dramatically

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Big news for California real estate numbers: Foreclosure activity in the state has hit an all-time low since the last housing boom.

During the first quarter of this year, only 18,567 mortgage default notices were filed – that’s 51.4% down from Q4 of 2012, and 67% down from the same time last year. The drop is being attributed to recent regulations placed on foreclosure activity – particular the Homeowner Bill of Rights that took effect on January 1.

DataQuick expects that foreclosure activity will pick up slightly once lenders adjust to these new policies.

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Housing inventory in Los Angeles at decade lows

California and especially Southern California real estate numbers have been largely affected by low inventory, with Los Angeles seeing a whopping 60% fall from 2010 inventory numbers. The high demand (we are seeing multiple bids on properties in areas like Echo Park) and lower inventory is bringing up home prices – good for homeowners needing to sell, not as good for those looking for the lower-priced deals. Strangely enough, the modest increase in sales we have seen does not appear to match up with the significant drop in inventory (meaning a home sold means a home no longer for sale), however investor money and low down-payment buyers are the ones buying, according to DoctorHousingBubble.com.

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Foreclosures account for less than half of shadow inventory

From October 2011 to October 2012, the national shadow inventory decreased to 2.3 million units – that’s down 12.3%. Current inventory is looking like a seven month supply and in terms of dollars we are looking at $376 billion. Seriously delinquent properties represent 1.04 million of those units, while 903,000 are in foreclosure, and 354,000 are REOs according to CoreLogic. That means that over half of the shadow inventory are delinquent, but not yet in foreclosure.

By the end of October 2012, California ranked second in serious delinquencies and saw a 9.7% decline. At the same time in the state, home sales have jumped 15% and prices 19% year over year.

Los Angeles City Attorney files lawsuit for "bank blight"

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Los Angeles City Attorney Carmen Trutanich has filed a lawsuit against US Bank for being behind they city's "bank blight," and calling them "slum lords."

The bank has foreclosed on over 1,500 homes in Los Angeles in the past year. Trutanich says it is responsible for allowing at least 150 of those homes to fall into disrepair, and thus inviting blight, crime, and lowering neighborhood property values.

Neighborhoods that have been hit hardest have the most problems - including stories of foreclosed properties perpetuate gang activity, squatting, dead animals, graffiti and even prostitution because the banks have failed to maintain the properties.

California is leading the nation in foreclosed homes, and many are worried that a back log of foreclosures in the state will perpetuate the problem (as of March 31, there were 362,000 homes in foreclosure or under water).

This isn't the first time the City of Los Angeles has filed a lawsuit like this, and it may not be the last - Trutanich was quoted by Reuters saying "that is one of the arrows in the quiver," but didn't provide additional details or names.

The city recently adopted charging banks fees on foreclosed homes to help pay for inspectors that will monitor the conditions of foreclosed homes in Los Angeles. The city also adopted a Neighborhood Stabilization Program this year to help pay for the rehabilitation of foreclosed properties in communities that have been impacted the hardest.