California Foreclosure Listings and Sales Accelerate: February Sets Historic Foreclosure Listings Record.

Foreclosure Radar[TM] Offers Unique Insight Into Subprime Lender Debacle

LOS GATOS, Calif. -- Foreclosure Radar, a foreclosure listings and software company, today announced figures that indicate home foreclosures in the United States being reported by the media likely understate actual foreclosure sales activity. Foreclosure Radar is the only service in California providing real-time, daily statistics on foreclosure auctions.

California Foreclosure Rates Worse Than Reported

According to the company, February saw 4,171 foreclosures with a total loan value of $1.64B for distressed properties sold at auction in California. This dollar volume easily surpassed the prior record reached in the third quarter of 1996, and represents a 48% increase from December of 2006.

This data from Foreclosure Radar sounds an alarm beyond the usual media reports. A widely circulated wire story dated Feb 12, 2007, noted that foreclosure filings were up 25% from January of 2006.

Sean O'Toole, CEO and founder of Foreclosure Radar, believes his data shows a more accurate picture. "The foreclosure sale numbers, sometimes referred to as REO's reported by similar listing services do not reflect current foreclosure sales activity. Instead, they are based on a document called a Trustee's Deed that gets recorded with the County weeks after the sale. With the rapid changes in the foreclosure market, the delay in waiting for these documents to be recorded has resulted in actual foreclosure sales to be under reported by more than 300%."

Foreclosure Radar is the only service that tracks the actual auctions of property, and not the county records tracked by others. The data presented by Foreclosure Radar is based on individual sales results at daily statewide foreclosure auctions: not estimates or projections.

"We've been tracking Home, Commercial, and Bank foreclosures for years and the recent rise is alarming," said O'Toole. "If you look at the data for Contra Costa County, for example, the number of foreclosures has increased by 865% in just one year and this is by no means the worst example in California."

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The percentage of foreclosed properties that are not sold at auction and returned to the lender has risen dramatically, and figures over the last four months support this trend:

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"From these trends we see the biggest impact being on recent homebuyers and their lenders. Of the loans returned in January, 60% were originated in 2005; 30% were originated in 2006," said O'Toole. "When we take a closer look at the sales, lenders are primarily taking back 80% first mortgages from 100% financing deals. In those cases the 20% second mortgages are simply wiped out."

These figures help explain the sudden surge in subprime lender failures, with nearly two dozen shuttered, including OwnIt Mortgage Solutions Inc., Mortgage Lenders Network (MLN), and ResMae Mortgage Corporation.

Last year, Ameriquest, formerly the country's largest subprime lender, folded quickly after its former CEO, Ronald Arnall, was appointed by President Bush to be ambassador to the Netherlands. The company shuttered virtually all of its offices and laid off 3,800 employees thanks to the collapsing subprime market. Major lenders like HSBC Holdings, and New Century Financial Corp are also feeling the pinch. HSBC reported on Feb 7 it was increasing its bad debt reserve by upwards of $1.7B.

An Opportunity for Real Estate Investors 

Foreclosure Radar will be launching a revolutionary new foreclosure service for investors and real estate professionals in April 2007. In addition they will be providing their unique foreclosure trend information to select media outlets. For more information and to be notified when the service launches please visit their website, www.foreclosureradar.com.