- Sacramento Real Estate Adventures - Your Sacramento Real Estate and mortgage blog!

Watching foreclosure trends in the Sacramento real estate market will help you monitor the level of distressed homes that will soon be listed for sale.  

The the first step of the foreclosure process begins when the bank files a Notice of Default. This document is typically filed after the homeowner is 90 days late making their payments. The Notice of Trustee Sale is the final stage of the foreclosure process. This notifies the homeowner that their home is going to auction and is filed 21 days before the sale date.

As you can see, Notice of Default filings have declined this quarter. Many banks are now working with homeowners using tools like a loan modification or a short sale to avoid the completion of the foreclosure process. Trustee sales for the most part have stabilized in the last 3 quarters.

After the filing of a Notice of Trustee Sale, there are only three possible outcomes.

1. The foreclosure sale can be canceled.
Reasons for a cancellation can involve a successful loan modification or short sale, a filing error, or a legal requirement to re-file the notice after extended postponements.

2. The property goes back to the bank.
When the property goes to the court house steps to auction, the bank will place an opening bid. If a third party doesn't outbid the bank's bid, then the property goes back to the bank. The property is listed for sale soon after as a bank owned home.

3. The property is sold to a 3rd party.
During the auction process the property is purchased by a 3rd party.

Foreclosure cancellations are on the rise, indicating more banks are willing to work with struggling homeowners. With more and more short sales hitting the Sacramento market... it's no surprise to me that we have seen an increase in foreclosure cancellations. 

Another interesting statistics foreclosures by loan amount. If you compare the 2 charts below you will see, for example, homes with loan amounts in the $150,000 range led the pack in 2007. This is most likely because folks who purchased in that price range had less reserves to get them through tough times than those in a higher price range.

Now fast forward to 2009... we are starting to see more foreclosure filings in the higher loan amounts.

Well that is a look at where we are as of the 2nd quarter of 2010 in regards to foreclosures. Make sure to come back and visit for future updates!

If you are looking to invest in the Sacramento real estate market, please give me a call to discuss your options!