A Mixed Month for Foreclosures

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Let's start with a review of foreclosure lingo. Notices of default (NODs) are the nastygrams sent to people who have repeatedly failed to make their mortgage payments. Notices of trustee sale (NOTs) are sent to owners who have failed to make things right with the lender after having received an NOD. The NOT informs the owner that the bank will repossess the house in the near future. The official minimum timeline between the NOD and NOT is 90 days, although it often takes longer than that given that the system is so flooded with foreclosures. The minimum time between NOT and actual repossession of the home is 21 days.

In shorthand I sometimes refer to NODs as defaults and NOTs as foreclosures. This isn't entirely correct, as the term "foreclosure" really describes the entire process outlined above. But "trustee sale notice" is a bit too obscure a term for the uninitiated, so I hope I can be forgiven for thinking that "foreclosure" is close enough in certain cases.

Alright, now that I've dragged you through the above explanation, let's have a look at last month's foreclosure data.

3,284 NODs were delivered in March. This is 2 percent higher than in February but ever so slightly lower than in January. Considering the number of business days in March, this is an all-time record on a per-day basis.

NOTs, in contrast, fell rather substantially. The 1,161 NOTs racked up in March represented a 17 percent drop from February.

We've had such one-month divergences between the growth of NODs and NOTs in the recent past. If it continues we will have to speculate as to a cause, but for now the most likely culprit is randomness.

Regardless of the month-to-month gyrations, the accompanying graph shows that the monthly pace of NOD and NOT accrual, even when adjusted for San Diego's population growth, remains near levels that dwarf anything we've seen in the past.

-- RICH TOSCANO