April 21st, 2011 2:21 PM by Lehel S.
Foreclosure activity in California declined during the first quarter of 2011 but the Golden State still posted the nation's third- highest foreclosure rate, according to RealtyTrac.
Foreclosure activity dropped 4percent during the January- March period and was down 22percent from the same quarter a year earlier.
Figures released Wednesday by RealtyTrac reveal that one in every 80 housing units in California had a foreclosure filing during the first quarter of 2011.
Foreclosure filings were reported on 239,795 U.S. properties in March, a 7 percent increase from the previous month but still down 35 percent from March 2010, when 367,056 homeowners received a foreclosure notice.
California had 60,241 foreclosure filings in March, up 7.14 percent from February but down 35.35 percent from a year earlier.
"The nation's housing market continued to languish in the first quarter, even as foreclosure activity fell to a three-year low," James J. Saccacio, chief executive officer of RealtyTrac, said in a statement.
Weak demand, declining home prices and the lack of credit availability are weighing heavily on the market, he said.
Saccacio said the housing market is still facing the "dual threat of a looming shadow inventory of distressed properties" and the probability that foreclosure activity will begin to increase again as lenders and servicers gradually work their way through the backlog of thousands of foreclosuresthat have been delayed due to improperly processed paperwork.
Karen Sauve, a pre-foreclosure specialist with Keller Williams in Pasadena, said the local foreclosure market has stabilized. But she's seen an uptick in short sales.
"I'm negotiating five short sales right now," she said. "I'm working with an REO agent in my office and a year ago he was getting seven, eight or nine foreclosures a month ... but now it's about three a month."
Sauve said banks have become considerably more receptive to the idea of a short sale, in which a home is sold for less than the balance owed on the property's loan.
"They have finally gotten that message," she said. "Bank of America told me they have doubled their staff for short sales. "And the credit damage for a consumer is much less."
Sauve said a homeowner whose house was sold in a short sale could likely get another mortgage loan 18 months to two years later, providing it's a loan they can handle.