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SoCal Foreclosures, Defaults Dip in 3Q

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LOS ANGELES (CBS) — New data shows the number of Los Angeles County homes slipping toward foreclosure dropped by 25.9 percent in the third quarter of the year, compared to the same period in 2009 .

La Jolla-based MDA DataQuick says mortgage lenders sent default notices to 16,189 homeowners in L.A. County in the third quarter, down from the previous year’s third-quarter total of 21,850.

In Orange County, default notices were sent to 4,938 homeowners, down 33.6 percent from the 2009 third-quarter total of 7,436.

Statewide, default notices were sent to 83,261 homeowners in the third quarter of the year, DataQuick reported, marking an 18.9 percent increase from the previous quarter’s 70,051 notices but down 25.5 percent from the same quarter in 2009, when 111,689 default notices were sent.

“Over the past year, with some minor ups and downs, financial institutions and their servicers have been processing a fairly steady number of defaults each quarter,” said John Walsh, MDA DataQuick president. “That probably has more to do with their capacity to process defaults, than with higher or lower levels of incoming distress.

“Policies can vary on how to use the formal foreclosure process in taking homes back and reselling them,” he said. “It would be nice to think that servicers are carefully following all the rules and regulations, but in the real world there are differences of interpretation, as we’ve seen in the news recently.

“It’ll be interesting to see how this plays out in fourth-quarter trends,” Walsh added.

Default notices do not always lead to a home foreclosure, according to DataQuick. Some homeowners emerge from the foreclosure process by bringing their payments current, refinancing or selling the home.

(©2010 CBS Local Media, a division of CBS Radio Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services contributed to this report.)

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