DISCOVERY BAY, Calif. - Foreclosures continued to rise in California in July. While banks are reclaiming the vast majority of these homes via trustee auctions, the number of homes being purchased by parties other than banks is increasing, according to ForeclosureRadar, a listing and information service that tracks every foreclosure auction in California.
In a report it released today, ForeclosureRadar states that 8,716 homes were sold at auction in California in July, a 24.6 percent increase over the previous month. Ninety-five percent of those homes' mortgages, valued at $3.33 billion, were returned to banks. However, it appears that investors are starting to bid for these loans a bit more aggressively. The number of foreclosed California homes purchased at auction by third-parties rose 18 percent last month.
ForeclosureRadar points specifically to Contra Costa County, where third-parties purchased 113 properties in the first seven months of this year, at an average discount of 30 percent, compared to 108 properties at an average discount of 28 percent for all of 2006.
It also appears that the foreclosed homes being sold at auction have newer mortgage loans. In January, 29 percent of these mortgages had originated in 2006; in July, that increased to 51 percent. Conversely, the auctioned homes with loans originated in 2005 fell to 39 percent in July from 58 percent in January.
Learn more about markets featured in this article: Los Angeles, CA.