For the third consecutive month, California foreclosure sales jumped significantly as lenders come off the moratorium, according to ForeclosureRadar.com. Foreclosure sales increased by 24.7 percent following a 31.9 percent increase in May, and a 35 percent April increase. Notices of Trustee Sale dropped by an unexpected 28.7 percent, with the timing of the drop indicating that it was in response to the California Foreclosure Prevention Act.
The California Foreclosure Prevention Act adds an additional 90 days to the time before which a lender can file a Notice of Trustee Sale. This law was widely believed to have little or no impact on foreclosure filings, as it exempted the majority of large lenders that operate in the state. A number of lenders appear to have self-imposed California’s latest foreclosure moratorium on themselves, despite having received an exemption from it. Given the number of exempt lenders it was quite surprising to see Notice of Trustee Sale filings drop by nearly 50 percent the day the new law went into effect.