Sweet Orange

According to DQNews, the number of Notice of Defaults (NODs) in California was 12.4% higher in the 2009 fourth quarter than it was in the 2008 fourth quarter. The number of fourth quarter trustee sales was also up: 10.6% more foreclosure sales occurred in fourth quarter 2008 than occurred in fourth quarter 2009.

Now here is where the numbers get tricky: In spite of the year-over-year increase in the overall numbers, foreclosure sales as a percentage of the housing market declined. In Q4-2009, 40.7% of the resales in California were foreclosure sales. However, in Q4-2008, 54.4% of resales in California were foreclosure sales.

The first set of numbers (the overall number of foreclosure sales) seem to be telling us that foreclosure sales are becoming more prevalent. But the second set of numbers (the number of foreclosure sales as a percentage of the total sales) seem to be telling us that foreclosures are becoming less prevalent.

In addition, more conflicting numbers exist:

DQNews states that the number of NODs declined between the third quarter and fourth quarter of 2009. And John Walsh, DataQuick president, had this to say about the foreclosure market:

Clearly, many lenders and servicers have concluded that the traditional foreclosure process isn’t necessarily the best way to process market distress, and that losses may be mitigated with so-called short sales or when loan terms are renegotiated with homeowners.

But many analysts are predicting a sizable increase in defaults when the terms for many outstanding loans adjust upward in the coming year. For example:

Amid falling home prices and a nasty labor market, roughly 1 in every 7 mortgages was either past due or in foreclosure by the end of the third quarter-the highest delinquency rate in the 37-year history of the Mortgage Bankers Association’s National Delinquency Survey. Two factors are expected to drive delinquencies even higher next year. First, nearly 1 in 4 homeowners currently owes more on their mortgage than the property is worth, which increases their odds of default. And secondly, the national unemployment rate-which already stands at 10 percent-will peak at about 10.5 percent in the first quarter of 2010, says Patrick Newport, an economist at IHS Global Insight. Additional job losses mean more borrowers won’t be able to pay their mortgage bills-”10 Things to Know About Real Estate in 2010,” Luke Mullins, U.S News & World Report

This quote from U.S. News & World Report is referencing the national housing market, but this would apply to Southern California as well.

According to public notices in the Irvine World News, the following homes in Orangetree were scheduled to go on the trustee auction block at the beginning of this year. Orangetree, which includes mostly condos (although a few detached homes do exist) is one of Irvine’s more affordable areas. The low prices are due to the limited square footage of these condos.

Here is a look at what happened to two of these homes.

126 Tangerine, Irvine 92618

• Approximate amount owed plus interest and fees: $507,868.95
• Details: 2bed/2 bath, detached home with 1133 SF
• Scheduled auction date: 2-5-09
• Sold for: $357,000 on April 13, 2009
• Side note: On March 14, 2009, the list price was increased from $359,000 to $410,000.

426 Orange Blossom #202, Irvine 92618

• Approximate amount owed plus interest and fees: $265,535.07
• Details: 1bed/1 bath, condo with 661 SF
• Scheduled auction date: 1-28-09
• Sold for: $268,814 on February 20, 2009
• Side note: On February 28, 2009, this home went on the market again for $205,057. On June 2, 2009, the price was reduced to $179,900; however, this listing is no longer active.

For a look at what is currently on the market in Orangetree, as well as what has sold recently, see the Orangetree map.

For more information on Orangetree, see this post: “A Look at the Housing Numbers for Irvine’s Orange Tree Neighborhood.“