Fewer foreclosures initiated in California in second quarter
Los Angeles Times
By Peter Y. Hong
...Foreclosures were down in California during the second quarter of this year, but the drop represents an eye in the foreclosure storm that's likely to continue in full force this year, a real estate research firm reported Wednesday.
The number of homes repossessed by lenders was down 28% from April through June compared with a year earlier, according to San Diego-based MDA DataQuick. Still, more Californians defaulted on their home loans. Default notices, which are sent to borrowers who miss several payments, were up 2% during the quarter from the previous year...
...Some believe lenders have slowed foreclosures to avoid flooding the resale market with low-priced homes. "I've talked to a number of asset managers and [bank] executives who've all told me the same thing," said Patrick J. Lashinsky, chief executive of ZIPRealty Inc., a national Internet-based real estate brokerage. "If they sell all their [foreclosed homes] at one time, they'll be selling against themselves and driving prices down. They'd rather meter them out."...
...USC economist Richard Green, who heads the university's Lusk Center for Real Estate, also doubts that lenders are controlling the foreclosure pace to avoid further glutting the market: "That would require a cleverness among lenders we're not seeing in any other dimension," he said. "If they could coordinate on that they could coordinate better on loan modifications." Green said foreclosures would keep rising because more prime borrowers were distressed because of job losses...