Foreclosures Dip

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Will Jason, Marin Independent Journal

October 18, 2011

Marin homeowners lost fewer properties to foreclosure in the third quarter and fewer borrowers fell behind on their mortgages compared with the same period of 2010, according to figures released Tuesday.

Down 5%

Marin homeowners lost 131 properties to foreclosure in the third quarter of 2011, virtually unchanged from 130 in the previous quarter and down 5.1 percent from 138 foreclosures in the same period of 2010. The number of notices of default — filed when borrowers fall behind on their mortgage — reached 295 in the third quarter, up 5.7 percent from 279 the previous quarter but down 5.8 percent from 313 in the same period of 2010, according to the figures from the San Diego-based tracking firm, DataQuick.

The leveling off of foreclosures in Marin could be caused by a reluctance by lenders to aggressively pursue delinquent borrowers, said George DeSalvo, a broker for Frank Howard Allen Realtors in Greenbrae who helps banks sell foreclosed properties. Their reluctance is driven partly by declines in home values, the risk of legal challenges and regulations aimed at protecting borrowers and tenants, DeSalvo said.

"I just don't know if the banks really want to own the properties," he said.

Marin's 5.7 percent quarterly increase in default notices was small compared with double-digit jumps that hit all other Bay Area counties and California. In the nine-county Bay Area, default notices rose to 12,092 in the third quarter, up 22.2 percent from the previous quarter; in California, they rose 25.9 percent over the same period to 71,275.

Compared with a year ago, third-quarter default notices were still down 14.3 percent in California and down by single digits in most Bay Area counties.

Marin was one of the counties least likely to see mortgages go into default along with San Francisco and San Mateo counties, according to DataQuick. Defaults were most likely in Sacramento, Madera and Stanislaus counties.

In Marin, a growing number of borrowers has been able to avoid foreclosure through short sales, in which the lender accepts a price lower than the amount owed on the mortgage.

In the third quarter, there were 96 short sales recorded in Marin, up 41.2 percent from 68 in the same period of 2010, according to data from Bay Area Real Estate Information Services Inc., a multiple-listing service. Over the same period, total sales of houses and condominiums in Marin rose only 15.2 percent, from 579 to 667.

Other homeowners have been able to stave off foreclosure through loan modifications, agreements by which banks accept a lower monthly payment from troubled borrowers. But that process can take months or years filled with uncertainty, said Dianne Levy, who fell on her house payments three years ago and eventually obtained a loan modification.

"It's a horrible, horrible process," said Levy, who now helps other troubled borrowers as a volunteer for Marin Family Action.

Levy, who paid about $700,000 for a house in Santa Venetia that is now worth less than $400,000, will likely never see any financial upside from keeping her house, but as a retiree she could not afford to walk away and rent an apartment instead, she said.

"If I were younger, I would have walked away," said Levy, 68. "It's that difficult to get a modification."

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