Florida Virtual Houses

Look closely at California’s foreclosure rate drop and you’ll see a new state law clouding the picture.

November 13th, 2008

You might be surprised to learn that the California foreclosure rate actually decreased by 18% in October compared to September, according to RealtyTrac’s new report. But the news isn’t necessarily good.

The state’s filings have dropped for two straight months because of a new law that requires lenders to make a number of attempts to contact homeowners and then wait 30 days before issuing default notices. This has slowed down the number of foreclosures and will likely just delay the inevitable.

Despite the drop in the California rate, foreclosures nationwide increased 5% from the previous month and 25% from Oct. 2007, RealtyTrac said.

And the worst is likely on the way. Rick Sharga, RealtyTrac's vice president of marketing, told me today that he expects a sharp increase in coming months as the economy worsens and more and more people lose jobs.

"Another wave right now is about to come, driven by the economic downturn," Sharga said.

Entry Filed under: News