Local foreclosures drop 19%, but relief may be temporary

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Local foreclosure rates slid in November to match a statewide trend of steady declines in recent months, but the lower frequency of trouble for homeowners may only be temporary, experts said.

The amount of foreclosure filings in Glendale, Burbank, La Crescenta and La Cañada Flintridge fell a combined 19% in November, compared with the month prior, according to a report prepared for the Glendale News-Press by real estate tracking firm RealtyTrac.

Those drops translated into declines in the rate of foreclosure filings in each community. 

Although California as a whole still has a much higher frequency of homes in foreclosure than the national average — one in 180 homes statewide, compared with one in 417 across the country — its total fell by 13% in November, according to RealtyTrac.

That was the state’s fourth straight month of declining foreclosure filings, said Daren Blomquist, a spokesman for the firm.

“We, at least for the time being, have kind of hit a ceiling in the foreclosure activity,” Blomquist said. “But we would not attribute a lot of that to the fact that there’s fewer distressed owners out there.”

Government efforts to stem foreclosures — by offering tax incentives to first-time home buyers or placing a stronger emphasis on loan modifications — have helped to keep some homeowners out of trouble, experts said.

But with area unemployment as high as 11% in Glendale, those efforts may not be able to sustain what is expected to be a short-term trend in lower foreclosure activity, they said.

And if foreclosures spike again, as most experts expect, a rebound in home values will be further delayed, they said.

“These are all temporary fixes,” said Paul Habibi, professor of real estate at the UCLA Anderson School of Management. “But the goal is to buy some time for employment to come back, which would then eventually allow home prices to gradually increase year-over-year.”

Check back for more on this story.

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Written by Zain Shauk

December 10, 2009 at 1:44 pm

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