California Market Report 

California Market Analysis 

Why are lenders nationwide sitting on hundreds of thousands of foreclosed homes? An estimated 80,000 of these foreclosed homes are in California alone. Some suggest it is because they are holding on to these properties until prices appreciate in order to recoup some of their losses. Others suggest that the lenders are releasing properties slowly to avoid flooding the market and creating more depreciation in prices. Still others believe that lenders just move that slowly.

For example, homeowners are typically able to stay in their home for almost 500 days after they stop making payments. An efficient process could reduce this time period by more than 50%. Instead, Bank of America just announced that they are freezing all foreclosures. Lenders in 23 other states have done the same with others likely to follow suit soon. This is in response to findings that questioned if some lenders and/or loan services were following the correct foreclosure protocol. California law required lenders to make contact with at-risk borrowers between January 1, 2003 and December 31 2007 to discuss options for avoiding foreclosure at least 30 days before starting the foreclosure process. It is estimated that internal reviews at B of A and other lenders can be completed within 30 days. Then the foreclosures process will be able to resume once again.

It is challenging at best to fully understand all that is going on within the lending industry. One thing you can take to the bank: Home values are attractive and interest rates are at a 50-year low, making this a great time to buy!