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OC Foreclosures Lowest in 12 Months

Foreclosures made up only 29% of all home resales last June, reaching the lowest percentage level in over a year, a DataQuick report shows. Experts chalk it up to the slowdown of foreclosure processing by most major lenders, as well as the rising demand for discounted foreclosures.

DataQuick, a San Diego-based real estate data provider, measured the percentage of homes sold through foreclosures in the 12-month period ending June 2009. Most of the foreclosures, the company said, were likely on bank-owned homes.

The percentage peaked at 46% at the start of the year and has been going down since, according to DataQuick. Last month's records almost equaled the two-year low in April 2008, when foreclosures accounted for only 27% of home resales.

Broker Steve Thomas believes that one reason is the general drop in foreclosures. The Aliso Viejo broker reported that 374 Orange County homes-only 4.2% of all active listings-were up for foreclosure last week.

A different provider, First American CoreLogic, showed that while the number of mortgages at least 90 days overdue was still rising as of May, foreclosure ratios are falling across most loan brackets.

Experts have cited a number of reasons why fewer banks are foreclosing. Most of them point to the increase in loan modifications, which stop the foreclosure process while the homeowner works out more comfortable terms with the lender.

More people are also turning to trustee's sales, which were not widely known at the start of the housing crisis. Trustee's sales are basically real estate auctions where homes can go for as much as 60% below the market price.

Others believe that banks have simply slowed down because of the large backlog of homes in default, as well as the volume of loan modification and refinance applications supported by the government's Making Home Affordable program.