Foreclosure activity plunged more than 60 percent across the region in the first quarter in response to rising home prices, a strengthening economy and a government assistance program that kicked in Jan. 1, a market tracker said Tuesday.
Mortgage defaults and foreclosures fell by large amounts across the state, said La Jolla-based DataQuick.
"Foreclosure starts were already trending much lower late last year because of rising home prices, a stronger labor market and the settlement agreement between the government and some lenders. But it appears last quarter's drop was especially sharp because of a package of new state foreclosure laws," DataQuick President John Walsh said in a statement.
The main one, California's "Homeowners Bill of Rights," includes a guarantee of a single point of contact for homeowners in the process of trying to keep a home and prevent a foreclosure while a loan modification is being negotiated.
Its impact is reflected in a sharp drop in foreclosure activity between last year's fourth quarter and the January though March period, DataQuick said.
DataQuick's report showed that:
Los Angeles County notices of default, the first step in the foreclosure process, plunged 65.2 percent in the first quarter to 3,985 from 11,443 a year ago. And they dropped 50.8 percent from 8,100 in last year's fourth quarter.
That's the lowest number since
lenders issued 3,480 default notices in the fourth quarter of 2005.
Foreclosures in the county fell 53.1 percent to 2,217 properties from 4,723 a year earlier and they dropped 36.6 percent from 3,496 in last year's fourth quarter. Foreclosures sank to their lowest level since the tally of 1,702 in the first quarter of 2007.
In San Bernardino County notices of default fell 64.7 percent to 1,667 from 4,722 a year earlier and were down 47.3 percent from 3,165 in last year's fourth quarter. Defaults here are at the lowest level since 1,473 in the fourth quarter of 2005.
Foreclosures in the county dropped 49.8 percent to 1,363 from 2,713 and were down 32.7 percent from 2,025 in the fourth quarter. The first quarter's total is the lowest since 909 foreclosures in the first quarter of 2007.
In Riverside County defaults fell 67.4 percent to 1,807 from 5,542 a year earlier and there were down 53.5 percent from 3,887 in the fourth quarter. That was the lowest level since 1,607 notices were filed in the fourth quarter of 2005.
Foreclosures in the county dropped 58.1 percent to 1,379 from 3,291 a year earlier and they fell 42.5 percent from 2,400 in the fourth quarter. It's the lowest since they were 813 in the fourth quarter of 2006.
For all of California, defaults declined 67 percent for 18,567 from 56,258 a year earlier and dropped 51.4 percent from 38,212 in the prior quarter. Defaults are at the lowest level since 15,337 were recorded in fourth-quarter 2005.
Statewide foreclosures fell 55.1 percent to 13,591 in the first quarter from 30,261 a year ago and were down 35.7 percent from 21,127 in the fourth quarter. Foreclosures are at their lowest level since 11,032 in the first quarter of 2007.
DataQuick said that most of the loans going into default are still from the 2005-2007 period. The median origination quarter for defaulted loans is still third-quarter 2006.
That has been the case for more than three years, indicating that weak underwriting standards peaked then.
The pace of foreclosure activity might pick up a bit in coming months as lenders adjust to the new rules but the situation is much better now than a year ago, said DataQuick analyst Andrew LePage.
"It's certainly safe to say that the worst of it , as it relates to this housing cycle, is in the rear-view mirror. But there are still a lot of people in distress and uncertain how lenders will manage their backlog of distressed properties," he said.