Foreclosure sales account for 31 percent of Q1 sales

Sales of foreclosure properties accounted for 31 percent of all residential sales nationwide in the first quarter, according to a foreclosure sales report published by RealtyTrac®. The report also showed that the average sales price of properties that sold while in the foreclosure process was nearly 27 percent less than the average sales price of properties not in the foreclosure process.

A total of 144,503 bank-owned (REO) properties were sold to third parties in the first quarter, a decrease of 13 percent from the previous quarter and down 27 percent compared with the first quarter of 2009. REO sales accounted for 19 percent of all sales in the first quarter, up from nearly 16 percent in the previous quarter, but down from 21 percent of all sales in the first quarter of 2009. REOs sold for an average discount of 34 percent, up from an average discount of nearly 32 percent in both the previous quarter and the first quarter of 2009.

Foreclosure sales accounted for 51 percent of all sales in California in the first quarter, up slightly from 50 percent in the fourth quarter, but down from 70 percent of all sales in the first quarter of 2009, according to the report.

Choice of Escrow Bill (AB 957)

C.A.R. achieved a compromise in AB 957, “Choice of Escrow Bill.” In multiple discussions with the author, C.A.R. worked with Assemblywoman Galgiani to come up with compromise language that will require fair treatment for real estate owned (REO) buyers in the choice of title and escrow providers.

The new language now protects fair negotiation over settlement services, and has removed C.A.R.'s opposition.

The new language will codify in California law the federal RESPA rules for selection of title insurance, and extend the same rules to protect buyers in the selection of escrow services. In a nutshell, the sellers will have to negotiate the selection of title and escrow. Under the new language, if an REO seller wants to try and direct choice of escrow, the seller will have to pay for the privilege.

AB 957 will also impose new penalties on REO sellers that violate the law, and will empower state regulators to go after both RESPA and "steering" violations.