Article from Lending Tree by Bryan Doyle
The California real estate market has been getting some good news lately. According to the San Diego based MDA DataQuick, lending institutions started fewer formal foreclosures last quarter. Mortgage loan default notices were down 4.2 percent from the fourth quarter of last year. Between January and March of this year, 81,054 notice of defaults were recorded compared to 84,568 in the final quarter of 2009.
Mortgage Rates Remain Stable
Lenders are warming up to the idea of mortgage loan workouts and the Obama administration has introduced plans to promote short sales and loan modification as foreclosure alternatives.
Furthermore the market received some good news last week when mortgage rates remained low despite the Federal Reserve ending its 1.25 trillion dollar mortgage loan purchasing program.
Foreclosures May Be Spreading to High Priced Neighborhoods
Although the declining number of default notices provides a reason to be optimistic, many experts are still hesitant to say the market is on its way to a full recovery.
The President of MDA DataQuick, John Walsh, warned the latest numbers were not a clear sign of a recovery stating, “We are seeing signs that the worst may be over in the hard-hit entry-level markets, while problems are slowly spreading to more expensive neighborhoods.”
The numbers supported Walsh’s comments as zip codes with a median home price below 500,000 dollars experienced a 5.8 percent decline in the notice of defaults from the prior quarter while default notices in zip codes with home prices above 500,000 dollars rose 1.5 percent.
Mortgage Loan Modification and Refinance Is Key
Congress recently called some of the largest banks to testify about their efforts to help troubled borrowers with their mortgage loan. Many of the banks boasted about the large number of employees they have dedicated to working with borrowers on home loan modifications.
If the banks continue to increase their efforts to help troubled borrowers refinance or modify their loan, further declines in defaults and foreclosures should result.
-David Baker
http://SayHalo.com