Photo: AP Images
For the first time since January 2007, California did not have the properties with the most foreclosure filings, according to RealtyTrac’s latest foreclosure report. California received a total of 18,093 foreclosure filings, and Florida had the most with 29,800.
Moreover, California had 4,386 foreclosure starts – the pace at which mortgages enter the foreclosure process – in January, down 62 per cent from last month, and 75 per cent from a year ago, hitting a seven-year low. The decline was largely due to a fall in notices of default (NOD).
The huge improvement in the state’s foreclosure market has been attributed to the California Homeowner Bill of Rights which became a law on January 1, 2013.
The law was created to guarantee a fair and transparent foreclosure process for homeowners. It prevents mortgage servicers from pushing the foreclosure process forward if the homeowner is trying to secure a loan modification, i.e. restricts ‘dual track foreclosure’. It also guarantees a single point of contact for homeowners as they deal with the process. The law also forces lenders will to verify documents before filing them and so on.
“As a result, the downward foreclosure trend in California accelerated into hyper speed in January, decisively shifting the balance of power when it comes to the nation’s foreclosure activity,” said RealtyTrac’s vice-president Daren Blomquist in a press release.
He added that the national foreclosure rate (which was down 28 per cent year-over-year and 7 per cent from last month) was also impacted in large part by this law.
California however continues to have a fairly high foreclosure rate, with one in every 753 homes receiving a foreclosure filing, above the national average.
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