Sacramento Real Estate Views

Foreclosures Decline 29.5% in September in Sacramento Real Estate

California State Law Slows Foreclosure Rate in September

The rate of foreclosures slowed dramatically in September due to state intervention in the foreclosure process for homeowners in the Sacramento region and California.  The new law, SB 1137, took effect in early September, requires lenders to make contact with buyers prior to filing a notice of default.  The law which was designed with the thought that lenders would help homeowners to make loans more affordable by locking in lower or initial interest rates for 24 months or reducing the principal.  Unfortunately, the net effect is a delay in the amount of homes coming on the market for the majority and not actual help for struggling homeowners.

California’s foreclosure rate slowed 51% September over August but accounted for 27% of foreclosure activity nationwide.  If the same thing happens in California that happened in Massachusetts, California is in for an inventory increase of epic proportions.

A Flawed Plan, Good Thought But Flawed

In Massachusetts, a similar law was passed that had the same effect in June, July and August.  The foreclosure rate slowed dramatically but in September jumped 465% as the lender required 90 day waiting period had elapsed before filing a notice of default.

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