REAL ESTATE: Foreclosure activity subsides in December

The December results surprise experts, but they expect the numbers to pick up in 2012 after months of delays
BY LESLIE BERKMAN STAFF WRITER lberkman@pe.com
Published: 12 January 2012 09:59 PM

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After surging in November, foreclosure activity subsided in Riverside and San Bernardino counties last month.
Some analysts, including those at RealtyTrac, the research company that Wednesday released the year-end housing data, said the December results were surprising. But they continued to predict that after a year of delays due to regulator intervention, a larger wave of foreclosures will hit the U.S. and Inland Southern California in 2012.
“I do expect we will see an increase in foreclosure activity across the country, including the Inland Empire, as (financial institutions) begin foreclosure proceedings on seriously delinquent loans,” said Rick Sharga, who recently was an official at Irvine-based RealtyTrac and now serves as executive vice president of Carrington Holding Co., a mortgage and real estate investment firm.
Other experts counter that given the improving economy, they don’t expect an increase in foreclosures this year. “The economy is getting better, employment is picking up, delinquencies are down. There is nothing that points to any giant wave of foreclosures coming down the pike,” said Chris Thornberg, founding economist with Beacon Economics. He added that although he expects the volume of foreclosures will be lower this year than last, it still will be historically high.
Foreclosure activity in December was subdued by the usual holiday foreclosure moratoriums and snowstorms, said Sharga. But the downturn last month was particularly pronounced, nationally reaching a 49-month low in foreclosure-related filings — including notices of default, trustee sales and bank repossessions.
In Inland Southern California, notices of default, the first step in the foreclosure process, dropped 44 percent from November to December.
“I think we are seeing a little of the calm before the storm,” said Sharga. He believes foreclosures would have increased rather than declined last year if the robo-signing controversy had not disrupted the process, prompting banks to pull back until they could make sure they were in legal compliance.
“There were strong signs in the second half of 2011 that lenders are finally beginning to push through some of the delayed foreclosures in select local markets. We expect that trend to continue this year, boosting foreclosure activity for 2012 higher than it was in 2011, though still below the peak …,” said RealtyTrac executive officer Brandon Moore in a statement.
In Riverside and San Bernardino counties, there were a combined 75,559 foreclosure filings in 2011, which was more than a 25 percent drop from 2010 and 40 percent drop from 2009. Since the foreclosure crisis started in 2007, 175,895 homes have been repossessed by lenders in the two-county region, said RealtyTrac analyst Daren Blomquist. Nationwide the number of bank-repossessed homes has reached 4million.
Chapman University Economist Esmael Adibi said he is not expecting a surge of foreclosure activity this year although he expects it will remain roughly as much of a problem as it was in 2011. If the Inland economy continues to revive at the pace it has in recent months, he said, it will help some people avoid foreclosure and help others purchase bank-repossessed homes that come on the market.
Pete Nyiri, a broker of bank-owned homes in western Riverside and San Bernardino counties, said, “We are seeing multiple offers on single-family homes. Right now we are not begging for buyers. We have plenty.” He said sales could be stronger if he had more homes to sell.


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