Some good news for the California real estate market came out, mortgage default notices for the 2nd quarter of 2010 are down 43.8 percent. That is great news as the pressure of foreclosures on the housing market has been weighing down the California real estate market.
Default notices, the first stage of the foreclosure process initiated by banks on troubled homeowners, plummeted 43.8% in the second quarter over the same period last year to 70,051, and 13.6% from the first three months of the year, research firm MDA DataQuick of San Diego said Wednesday. via the LATimes
There are a few reasons for the reduction in default notices, but they are all good ones for the industry. First, banks cut way back on subprime mortgages which means the quality of the loans out there has improved. Add into the equation an active housing market in the 2nd quarter with the home buyer tax credit to provide activity in the market and an uptick in the economy you can see why people were more secure in paying their mortgage on time.
What the next challenge for the real estate industry is now in California is how the economy does. Unemployment and underemployment is the challenge that the people will face when it comes to paying their mortgage. If the pressure from foreclosures hitting the market lessens housing prices will stabilize and people will trust the market.
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Lenders and servicers are becoming more efficient in processing mortgage modifications. In addition, homeowners who are in trouble are seeking help sooner. The word is finally reaching the homeowners “the bank doesn’t want your house. The bank wants to help you keep your house”.