California Foreclosures Drop to Five-Year Low

There are signs that California is recovering from the housing crisis as new data, released Monday, showed that foreclosures in the state have dropped to the lowest rate since 2007.

DataQuick, a San Diego-based real estate agency, reported that 54,615 foreclosure notices were filed in the second quarter a 3.6 percent drop from the same time last year. In the overall picture, incremental decreases represent a 48.5 percent drop in foreclosures since 2007.

The economy in the Golden State is improving, though the rest of the country remains stagnant. Roughly, 38,000 statewide jobs were added in June.  

Foreclosure starts have been on the decline since last year when federal and state authorities launched an investigation into the way mortgage servicers process and sign default documents. The unethical practices of lenders led California legislators to pass a Homeowners Bill of Rights which requires lenders to provide more documentation for foreclosure proceedings and forbids the practice of dual-tracking, a practice where banks consider a mortgage modification while also moving to seize a home.

As mortgage lenders in California must now meet tougher standards, they will likely be looking for alternatives to the lengthy foreclosure process. They may be more receptive to mortgage modifications or short sales, which can both be more easily obtained by a knowledgeable foreclosure lawyer.

The foreclosure crisis throughout the country also shows signs of slowing, though there are spotty increases here and there. Foreclosure attorneys have some role to play in declining home seizures as they can offer the homeowner a different option to losing their home.

Whether a homeowner plans on seeking a mortgage modification, a short sale, or are even considering bankruptcy, they will need a foreclosure lawyer on their side, helping them through this difficult time.