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Foreclosures down 13% in 2010, 31% from '08 peak

Andrew Keatts, SAN DIEGO DAILY TRANSCRIPTS

Thursday, January 6, 2011

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Foreclosures down 13% in 2010, 31% from ’08 peak
For the second consecutive year, San Diego County foreclosures and notices of default declined in 2010.
There were 13,467 trustee deeds -- the last step in the foreclosure process -- filed with the San Diego County Assessor this year, 13 percent fewer than in 2009.
Last year, there were 20 percent fewer foreclosures than in 2008, which had more foreclosures than any other year on record.
All told, foreclosures have now fallen 31 percent from a 2008-peak of 19,575.
“The trend line in foreclosures is on the way down,” said Alan Gin, professor of economics at the University of San Diego. “This is very good as far as the economy is concerned.”
Notices of default were issued to 24,835 borrowers last year, or 35 percent fewer than in 2009.
The highest year on record for defaults, 2009 had 11 percent more than 2008, which was aided by a three-month valley coinciding with the election.
The 829 foreclosed homes during December were comparable to the 787 in November, but both months were significantly below the yearlong trend.
In the first 10 months of 2010, foreclosures fell between a July low of 1,072 and an April high of 1,371.
Fall revelations that employees authorized foreclosures without adequately reviewing the underlying documentation lead many of the nation’s largest lending institutions to impose a temporary foreclosure moratorium to reconsider their practices.
“The moratorium probably impacted December’s low foreclosures, but the 35 percent drop in defaults (for the year) shows that there are real improvements going on,” Gin said.
In each of the last three years, foreclosures have fallen from October to November, before rising again in December, suggesting there might have also been a seasonal effect of some kind.
Gin differed with Kelly Cunningham, economist and senior fellow at National University System Institute for Policy Research, on whether the sub-1,000 monthly foreclosure rate would carry into 2011.
Cunningham said significant job growth would be needed to prevent an increase in the foreclosure number.
Predicting a historically modest increase of 10,000 to 15,000 jobs in the local economy, Gin said foreclosures would fall for the third consecutive year.
“Someone with a job, even if they’re underwater, is less likely to walk away from their home,” he said.
Federal efforts to encourage refinancing of delinquent or underwater loans, according to Cunningham, has effectively delayed the process of foreclosing on the county and nation’s distressed inventory.