Foreclosure filings are way down - but why?

The folks at RealtyTrac insist that the decline has nothing to do with an improving housing market - that it merely reflects a slowdown in transactions due to legal and regulatory holdups. But the folks at DataQuick, while not dismissing those factors, point out that there may be other, more positive explanations for the decline. This is not some academic exercise among number crunchers - foreclosures have been a big hindrance in the housing recovery, and if there are signs that the worst is over, it's a huge positive for the state and local economy. From the Dataquick press release:

"A lot of theories are being floated as to why the numbers are down. Bank policy changes. Legal challenges. Politics. Holding back temporarily so as not to flood the market. The fact of the matter is that no one really knows, outside of lending and servicing industry insiders. One thing is certain: Homeowner distress spreads fastest when home price declines are steepest. And it now appears likely that, barring some new economic shock, the worst of the price declines are behind us," said John Walsh, DataQuick president.

No one really knows - how refreshing to have a so-called expert admit to not having the answers. What he does know is that California mortgage defaults are at their lowest level since 2007, which is a good thing. Second-quarter NODs in L.A. County were down almost 14 percent from a year earlier; in OC they were were also down around 14 percent.

Notices of Default

County/Region 2010Q2 2011Q2 Yr/Yr%

Los Angeles 13,045 11,250 -13.8%

Orange 4,313 3,705 -14.1%

San Diego 5,458 4,158 -23.8%

Riverside 7,266 5,534 -23.8%

San Bernardino 5,945 4,334 -27.1%

Ventura 1,346 1,133 -15.8%

Imperial 375 270 -28.0%

Source: DataQuick