FAQs with TLS: The team at Total Lender Solutions (TLS) answers your questions about the real estate market and commercial property foreclosures to keep you informed about the latest industry trends.
The Question:
Are foreclosures rising in California?
The Short Answer:
Foreclosure starts are slowly rising in California. However, the real estate market in California and the rest of the United States is enjoying more stability than it has in the last decade.
“It’s always best to look at the data and not the headlines. While foreclosure starts have increased in California, the numbers are significantly lower than pre-pandemic levels.”
– Randy Newman, founder and CEO of Total Lender Solutions
Why It’s a Popular Question
Ever since the COVID-19 pandemic, there have been major changes in both the residential and commercial housing markets. Home prices have been rising significantly throughout most of the United States, while office and retail properties have faced challenges with vacancies. There’s also uncertainty about America’s economic trajectory.
All these factors may be causing real estate investors to worry about a real estate market downturn.
Foreclosure Starts Are Rising in California…
Here’s what we gathered from the latest information released by ATTOM:
There was a monthly increase:
California had 2,719 foreclosure starts in January 2024, a 43% increase from the previous month.
There was a yearly increase:
In 2023, California had 32,905 foreclosure filings. This is a 41% increase from the 2020-2022 pace.
…But They’re Lower Than Pre-Pandemic Levels
California’s foreclosure increase might be startling, but the numbers aren’t as scary as they look, especially when you compare them to pre-pandemic levels.
When compared to the pre-pandemic period of 2015-2019, California’s foreclosures were actually down by 59% in 2023.
The real estate market is nowhere near as volatile as it was a decade ago, and that’s true in California and also the rest of the United States. In 2023, national foreclosure filings were down 88% from their peak levels in 2010. It’s unlikely the market will experience that kind of turbulence anytime soon.
Why Are Foreclosure Starts Rising in California?
While there’s no need for lenders to panic, it’s clear that foreclosure starts are rising slowly, but steadily in California. What might be causing this?
Real estate experts suggest that it’s simply a return to the pre-pandemic norms.
“During the pandemic, borrowers got a lot of help through mortgage relief and loan forbearance programs. Many of these programs have ended, so now it’s easier for lenders to pursue foreclosure. We’re seeing an increase in foreclosure starts because the market is returning to normal.”
– Randy Newman, founder and CEO of Total Lender Solutions
Newman also points out that foreclosures aren’t necessarily signals of market calamity. Many foreclosed properties are only started and not completed.
“In many situations we handle, the lender never reaches the stage where the property in question is sold or seized. They’re able to reach an agreement with the borrower, which saves everyone time, money, and risk. Starting the foreclosure process can be an effective way to encourage the borrower to engage in meaningful dialogue and negotiations.”
– Randy Newman
Need to Start a Business Foreclosure in California?
If you’ve invested in commercial property in California and your borrowers have missed one or more loan payments, then it may be time to issue a notice of default and begin the foreclosure process.
Foreclosures are increasing in California, but the state’s strong job market and high property values make it easier for you to successfully resolve your foreclosure situation, especially when you have the experts at Total Lender Solutions guiding you.
Our team can handle:
Contact us today to get the foreclosure assistance you need to achieve a strong outcome.
