Not the kind of news people were hoping for, but not surprising either, is that we saw a record high for notice of trustee sales (aka pre-foreclosure notices) in March. The Republic lays out several of the potential reasons, including more certainty in the market over governmental plans. Now that banks/servicers know who will and who will not qualify for the Making Home Affordable plans laid out by the Obama administration, they can move forward with a backlog of foreclosures they were holding off on. So the hope is that March is simply the release of a bottleneck of pre-foreclosure notices and that April will see a drop back down in numbers.
However, as I have been writing, there is another large bubble of negatively amortized option arm mortgages set to recast over the next two years that may exacerbate the problem. That being said, the new governmental programs will at least give these homeowners an idea of whether they should try to modify now or whether they need to seek other options (short sale or walking away). Hopefully this increased certainty speeds up the process and allows prices to find a bottom sooner rather than later in the Valley. That all hinges of course on whether the banks stick to the guidelines of the new plan (certainly not a given).
Note that in Arizona a notice of trustee sale typically indicates that the trustee sale at auction will occur 90 days following the notice (the statutory minimum), so the homeowner has a minimum of 90 days from the date of the notice to find a workout for their home loan. Not all notices lead to a trustee sale because some homeowners are able to get a loan modification, complete a short sale or catch back up on payments.
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