- May 25, 2002
- Professional Status
- Certified Residential Appraiser
Last Friday, information service ForeclosureRadar reported that foreclosures in California soared 454% in January compared to foreclosure volume just one year earlier. A total of 19,821 properties sold at foreclosure auction, with a combined loan value of $8.06 billion.
While this figure alone would give any homeowner in California cause for concern, the bigger worry comes from looking at the details behind the data.
The fact that 98% of auction sales went back to the lender in January is not the surprising part. What should be sending off alarm bells are the deep discounts being offered by lenders at auction. Of the 19,821 homes that went to auction, 13,950 were discounted, roughly 70%. The opening bid for this group saw an average discount of 16%. Of that total, 4,624 had discounts of 30% or more, according to ForeclosureRadar.