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Coachella Valley foreclosures rose in June.

Coachella Valley foreclosures rose in June as a lingering trail of distressed homes returned to their lender, a new housing report shows.

The slight increase may continue into the fall, real estate analysts and loan officers said. Borrowers who had tried to avoid foreclosure through efforts under the California Homeowner Bill of Rights had delayed the inevitable, they said.

“It’s been so long, and it’s been so much time, at this point, the people that are losing their houses have exhausted every other option,” said Bret Cohn, a senior loan officer for Stearns Lending in Palm Desert.

Soaring home prices lifted the values of more underwater homes this year and gave more homeowners a chance to sell with equity instead of a short sale or foreclosure. But for those in the most dire of situations, foreclosure may have been the only option left.

“With appreciation up 20 percent from the previous year, there’s not as many people in negative equity positions,” Cohn said. “The people who are foreclosing, who had little or no money down for an FHA loan, may had a catastrophic event, and are now losing their house.”

Those last-resort homeowners added to the bump of foreclosures in June. There were 231 foreclosure filings in June, up 1.7 percent from the same month last year. The number was the same for May, according to RealtyTrac, an Irvine-based real estate information services firm that tracks foreclosures reported in public records.

California foreclosures include three types of filings: notices of default, scheduled public auctions and bank repossessions, if the owner fails to pay what is owed during default. These are called REO, or real estate owned, sales.

There were more than 500 foreclosures started through the courts in March, the highest number observed so far by RealtyTrac, said spokeswoman Ginny Walker. Foreclosures are not required to go through the courts in California, but the Homeowner Bill of Rights passed last year made the non-judicial process less appealing to some lenders, Walker wrote in an email. So more lenders are opting to go through the courts to foreclose on homes still in limbo.

The number of homes starting the foreclosure process, those with a notice of default, dropped from last year. There were 91 notices of default in June, down 23.5 percent year-over-year.

That trend mirrored the rest of California. There were 17,524 notices of default across the state from April to May, according to county recordings. That’s down 31.9 percent from the same period in 2013.

But more homes in the Coachella Valley actually finished the process — and returned to a bank. In June, there were 63 REO sales, up 23 percent from June 2013. That’s an uptick from 54 foreclosures in May and 51 last year, according to RealtyTrac.

The number of REOs also ticked up across the state, rising 18 percent from last June.

In the Coachella Valley, the biggest increase of bank repossessions was in Indio. The city had nine REO sales, up from only three in May and two last year.

North Desert Hot Springs had the highest concentration of foreclosure activity. One in 405 housing units was going through foreclosure in June in the ZIP code 92240, according to RealtyTrac. That’s compared to one in 1,228 housing units across the country.

Bank repossessions and short sales made up 13 percent of all single-family home sales in the desert in June, according to the California Desert Association of Realtors, which tracks property listings on its private Multiple Listing Service. That’s up from 9 percent month-over-month but down from last year’s 18 percent.

Most of the homes going through foreclosure are still remnants from the housing bust that contributed to the recession. In the second quarter of 2014, most of the loans going into default in California originated between 2005 and 2007, the tipping point of the recession, according to DataQuick, a San Diego-based real estate data firm.

The country is dropping back toward a normal level of foreclosure activity, Walker said, citing RealtyTrac data.

Nationwide, the normal level is between roughly 75,000 and 100,000 foreclosure filings per month. The peak was 330,000 filings per month in 2009. This year, foreclosure filings are averaging about 116,000 a month. The average pace of decrease has been 2 percent, meaning the country should fall to 90,000 filings a month by March.

In California, overall foreclosure activity is down, in contrast to the Coachella Valley. The Inland Empire and desert were harder hit during the Great Recession and have taken longer to rebound.

In June, there were 12,804 foreclosure filings in the state, down from the peak of 108,104 filings in July 2009. The June figures show that the state is reaching “consistently normal levels of foreclosure activity,” Walker wrote.

Dominique Fong is a business and real estate reporter for The Desert Sun. She can be reached at (760) 778-4661, dominique.fong@desertsun.com and on Twitter @dominiquefong.

June foreclosure filings

Total Coachella Valley foreclosure filings rose in June compared to May:

• 92234, Cathedral City, 33, -8.3%

• 92236, Coachella, 19, 111.1%

• 92240: Desert Hot Springs, 36, 16.1%

• 92241: Desert Hot Springs, 1, -50%

• 92210: Indian Wells, 1, -80%

• 92203: Indio, 20, -4.8%

• 92253: La Quinta, 28, 33.3%

• 92211: Palm Desert, 19, -20.8%

• 92260: Palm Desert: 22, 0%

• 92262: Palm Springs: 20, -9%

• 92264: Palm Springs: 18, -14.3%

• 92270: Rancho Mirage: 13, 0%

• 92274: Thermal: 1, -75%

Source: RealtyTrac

Article source: http://www.desertsun.com/story/money/real-estate/2014/07/30/coachella-valley-foreclosure-rate/13382983/

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