Foreclosure activity drops sharply in Silicon Valley last month
Posted on Tue, Sep 15, 2009
Foreclosure activity dropped sharply in Silicon Valley last month, but it’s too soon to declare the housing crisis over, the expert who compiles the data cautioned. But at least some of the decline may be due to loan modifications worked out under an Obama administration program.
Lenders sent notices of default, the first step in a foreclosure, to 1,256 homeowners in the area, an 18 percent drop from July. Notices of trustee sales — the last step before an actual foreclosure sale — also dropped in August, with 1,007 of those notices issued by lenders compared with 1,138 the previous month, an 11.5 percent drop. Actual foreclosure sales were up 6 percent to 439 sales.
“It’s definitely a real drop, but I urge some caution in thinking it’s a green shoot,” said Sean O’Toole of ForeclosureRadar, a Discovery Bay company that tracks California foreclosure activity.
O’Toole said that the underlying problems causing the foreclosure crisis remain — negative equity on loans that are “underwater” and continuing delinquencies in making mortgage payments.
“Until we see a sustained trend for a few months, I wouldn’t raise hopes that this is the beginning of the end along those lines,” he said.