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California Foreclosure Starts Lowest Since 2005

A total of 17,524 Notices of Default (NODs) were recorded at county recorders offices during the April-through-June period. That was down 8.8 percent from 19,215 in the prior quarter, and down 31.9 percent from 25,747 in second-quarter 2013, according to DataQuick, which is owned by Irvine-based CoreLogic, a leading global property information, analytics and data-enabled services provider.

Last quarter's NOD tally was the lowest since fourth-quarter 2005, when 15,337 NODs were recorded. NOD filings peaked in first-quarter 2009 at 135,431. DataQuick's NOD statistics go back to 1992.

"It looks like the mortgage servicers doing the foreclosure paperwork are systematically working through a backlog. While their pile is getting smaller, they're working at a steady pace. With one exception, the number of NODs we've seen filed each quarter over the last year-and-a-half hasn't changed much, and probably just reflects staffing and workload logistics," said John Karevoll, DataQuick analyst.

In first quarter 2013 California saw 18,568 NODs filed. In last year's second quarter the number was 25,747. In third quarter 2013 it was 20,314. Fourth quarter was 18,120. In first quarter 2014 the tally was 19,215, and last quarter it was 17,524.

"The relatively high NOD tally in second quarter last year reflected a one-time bump because of deferred activity and policy change. Otherwise the quarterly flow of NODs since early last year has been remarkably flat, and probably doesn't reflect any meaningful changes in trends. The overall trend is that homeowner distress continues to decline because of a stronger economy and rising home prices," Karevoll said.

This graph shows the number of Notices of Default (NOD) filed in California each year.   2014 is in red (Q1 plus Q2 times 2).

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