I thought it would be interesting to take a closer look at foreclosure activity and historical statistics to help us anticipate the next few months in the Pasadena real estate market.
Let’s starts with definitions:
Foreclosure – A legal process in which, against the wishes of the owner, real property is sold to satisfy a public or private debt for which the real property has been pledged as security.
Notice of default (NOD) – a notice that is filed with the Los Angeles county recorder when a homeowner is not current on the loan that is secured by the homeowner’s property. If the default is not cured within a statutory period of time, the lender can move to auction the property to the highest bidder.
Foreclosure Sale (NOTS) – The actual sale of real property at the conclusion of a foreclosure proceeding. The sale may be to a third party as a result of a high bid, or to the foreclosing creditor (the lender) if there are no bids higher than the amount of the defaulted debt plus foreclosure costs. If the sale generates proceeds beyond the satisfaction of the debt and foreclosure costs, the balance generally must be refunded to the party who has lost title to the property. (the homeowner)
Real Estate Owned – Real property that has been foreclosed by a lender and is now owned by the lender.
Here’s a look at the actual Pasadena Notice of Default vs. Notice of Sale Filings:
Notice of Default is usually filed when the lender feels that they have exhausted all avenues for curing the payment delinquency – usually 3 months or so after the homeowner stops making their mortgage payments. This is the official start of the foreclosure process.
Notice of Trustee Sale is filed on the 90th day after the Notice of Default. The lenders need to file a notice with the IRS, notify the borrower (homeowner) and publish a Notice of Sale in a local newspaper for three weeks in a row.
Looking at the above chart, it’s clear that banks are increasing their auction activity and the filings for the Notice of Trustee Sale is on the rise. In December of 2009, 236 homeowners were notified that their home will be going to Auction!
Pasadena’s Winning Bids:
Taking a look at the last three months of the actual foreclosure auction data, it’s interesting to note, that the average winning bid is significantly below the published bid, but above the opening bid. We are alos looking at entry level Pasadena homes.
|Foreclosure Bids – Pasadena CA|
|Provided by ForeclosureRadar.com and subject to its User Agreement.|
Here’s an interesting chart showing us the estimated real estate Market Value of Pasadena homes going into foreclosure:
- Home owners of more expensive homes are not seeing as many Notices of Sale. They may be more aware of available options like short sales and have access to financial advisers.
- Homes valued at $500,000 or below, have a substantially higher rate of Notices of Sales than homes above $500,000.
Last, but not least, let’s see what the Outcomes for Pasadena Foreclosures look like:
- Quite a few of the Pasadena foreclosure sales are canceled each month. Most likely, the homeowner is either negotiating a short sale or a mortgage re-negotiation with the lender. The cancellation can be temporary.
- Most of the homes revert back or are bought back by the lender.
- The number of the actual sales is significantly lower than the number of filings monthly!
Interested in seeing similar data for California? Visit California Foreclosure Statistics.
If you are facing a foreclosure and need help understanding your options, give us a call at 626-629-8439(VIEW)
IRINA NETCHAEV & ASSOCIATES
Pasadena Views Real Estate Teams