Feldman Law Center - California Foreclosures and the Godot of Government Programs - By: Feldman Law Center

Feldman Law Center - News by Feldman Law Center -- California foreclosures which were taken to sale at auction reached 17,871 in May, a 31.9 percent increase from April, according to a report Tuesday from ForeclosureRadar, a Discovery Bay-based company and online seller of California default data.

The number could be much higher but lenders continue to voluntarily postpone the majority of foreclosure sales, the report says. Still, “Notices of Trustee” sales, which set the auction date and time, rose 42 percent from April, breaking a record set in July of 2008. The new record indicates that foreclosures that will be taken to auction sales are likely to continue to rise in the weeks and months ahead, the report says.

Housing market watchers have lately noted a growing backlog of foreclosures with rising defaults, but, at least for the months of April and May, the number of homes actually foreclosed dropped. “The reality is that we have very few homeowners being foreclosed on when viewed as a percentage of those scheduled to be foreclosed on, in default, delinquent, or upside down in their mortgage.”, according to Sean O’Toole, CEO of ForeclosureRadar.

It’s unclear whether lenders simply could not process the volume of foreclosures, or were deliberately delaying foreclosures to either allow loan modifications to be put in place or were trying to keep from further flooding the market with foreclosed homes for sale. The record number of filings in April and May could be the start of movement on that backlog. The issue going forward is how much more backlog appears and what will happen to overall prices when it is liquidated.

Another issue in the foreclosure numbers is the slow uptake of the Obama Administration’s “Making Home Affordable” plan. The Treasury recently announced that some 15,000 borrowers were in trial loan modifications with Chase Home Mortgage and 3,000 who were in a trial with Wells Fargo, but in the face of the one million foreclosures reported through May the numbers are extremely anemic.

In addition to the weak trial loan modification numbers, as of a couple weeks ago, no one was saying how many home loan modifications (ObamaMods) had actually been completed since the start of the program. The Treasury’s estimates started at 55,000 but have since been stair-stepped down to “… the Treasury is working with mortgage companies to fine tune reporting systems.”
Try as they might, government initiatives are being used more for public relations from the lenders than for loan modifications. The big yawn from lenders greeting loan modification applicants has slowed their process down to a crawl while attorney driven home loan modifications are continuing to be executed at a brisk pace.

It’s impossible to quantify how many homeowners fell victim to the well intended advice of politicians to negotiate their loan modifications directly with their lenders and then were foreclosed when their modification didn’t materialize. It’s safe to say that the overall slowdown in loan modifications and the record foreclosure numbers indicate that the do it yourself side isn’t winning. The numbers are also further evidence that homeowners need a lot more than government programs and bad advice to protect their homes from foreclosure. What’s being proven out is that attorney driven home loan modifications are what’s working now. Realizing that, and acting upon it, will actually keep struggling borrowers in their homes, not waiting for the “Godot” of a government program that never arrives.

Feldman Law Center - News by Feldman Law Center -- California foreclosures which were taken to sale at auction reached 17,871 in May, a 31.9 percent increase from April, according to a report Tuesday from ForeclosureRadar, a Discovery Bay-based company and online seller of California default data.

The Feldman Law Center was founded for the purpose of negotiating loan modifications on behalf of their clients. These negotiations have two major goals; to reduce monthly mortgage payments to a level of affordability for the homeowner and to either stop or avoid foreclosure proceedings. Call The Feldman Law Center today at 800-588-0425.