Joe Park

Discovery Bay, CA, January 13, 2009 – ForeclosureRadar (www.foreclosureradar.com), the only

website that tracks every California foreclosure with daily auction updates, today issued its California

Foreclosure Report for December 2008 and year-end summary. Notices of Default have rebounded

from the stall caused by California State Senate Bill 1137, which temporarily slowed foreclosures by

imposing new requirements on lenders. With 42,421 filings in December, Notices of Default are back to

the record levels reached in the second quarter of 2008, nearly doubling the 21,557 Notices of Default

recorded in November. Notice of Trustee Sale filings were relatively flat month-over-month, however

Notices of Trustee Sale are filed an average 116 days after the Notice of Default so a rebound in the

coming months is likely.

California saw unprecedented foreclosure activity in 2008, with 249,940 properties sold at

trustee sale auction – representing $107.8 Billion in combined loan value. Of those properties 96.4%

went back to the lender after no bid was received from a third-party.

o There were a total of 437,955 Notices of Default filed in 2008, an increase of 56 percent over the

279,821 Notices of Default filed in 2007.

o Notice of Trustee Sale filings increased 122.9 percent over 2007 rising from 157,273 filings in

2007 to 350,514 filings in 2008. Of the Notices of Trustee Sale filed in 2008, 16 percent remain

scheduled for sale at auction, 17 percent have been cancelled, and 66 percent were sold at

auction.

o Properties sold at auction increased by 158 percent by volume, and 179 percent by combined

loan value. Lenders took back a total of 241,093 properties, with a combined loan value of

$103.9 Billion.

o The amount lenders discounted properties at auction from the outstanding balance increased

from an average discount of 16.1 percent in January to 39.5 percent in December. In January

only 3 percent of properties taken to auction were deeply discounted (bidding started at a

discount of 50 percent or more from the loan balance). By December 40 percent of sales were

deeply discounted.

o The time between the filing of a Notice of Default, and a property being sold at auction on the

courthouse steps increased 19 days over the course of the year, to an average of 165 days in

December.

o Notices of Default increased 100 percent over Notices recorded for November, to a total of

42,421 default filings, a 24.7 percent increase over December 2007.

o Notices of Trustee Sale, which set the auction date, time and location, were flat from November

to December, with 27,497 filings. Notices of Trustee Sale for December represent a 29.8 percent

year-over-year increase, but are still 30 percent below the peak levels reached in July of 2008.

o Properties taken to sale at auction increased only slightly between November and December, to

16,298 sales, a 72.6 percent increase from the same time last year. Third party purchases at

trustee sale auction decreased 12.5 percent from November 2008, but were still 156 percent

above third party purchases in December 2007. Lenders took back nearly 95 percent of the

16,298 properties sold at auction, with a combined loan value of $8.95 Billion.

“The effort by the California State Legislature to reduce foreclosures has now clearly failed,”

says Sean O'Toole, founder of ForeclosureRadar. “While State Senate Bill 1137 was well intentioned,

forcing lenders to talk to homeowners won’t fix this problem.”

While a number of lenders have announced significant loan modification programs to reduce

payments to affordable levels, these plans fail to address the fact that the average foreclosure in

California now has $180,000 in negative equity. “Lowering payments may provide a temporary fix,”

adds O’Toole, “but lenders simply don’t have sufficient reserves to lower principal balances enough to

help homeowners in foreclosure escape the prison of debt their home now represents.”

In December, the average estimated value of a home sold at foreclosure auction was $283,624, with

an average total loan balance of $464,270. Of these, 60 percent had second mortgages for which little or

no equity remained to secure their interest in the property. By not foreclosing, second mortgage holders

often retain their ability to collect on loans even after their secured interest is wiped out by the

foreclosure of a first mortgage. This issue often impairs the ability of first mortgage lenders to modify

their loan sufficiently to help the homeowner, a simple fact that further curtails the effectiveness of

SB1137.

Rankings are based on population per foreclosure sale. NOD indicates the number of Notices of Default

that were filed at the county, and NTS indicates filed Notices of Trustee Sale. Sales indicates the

number of properties sold at foreclosure auction. Percentage changes are based on monthly Sales. The

data presented by ForeclosureRadar is based on county records and individual sales results from daily

foreclosure auctions throughout the state – not estimates or projections.

ForeclosureRadar is the only web site that tracks every foreclosure in California with daily updates on

all foreclosure auctions. ForeclosureRadar features unprecedented tools to search, manage, track and

analyze preforeclosure, foreclosure auction, short sale and bank owned real estate. The web site was

launched in May 2007 by Sean O’Toole, who spent 15 years building and launching software companies

before entering the foreclosure business in 2002 where he has successfully bought and sold more than

150 foreclosure properties. ForeclosureRadar is an indispensable resource for real estate agents, brokers,

investors, lenders, mortgage brokers, attorneys and other real estate professionals specializing in the

California real estate market.