County has more foreclosures

The number of homes nearing foreclosure in Orange County spiked during the first quarter, indicating that banks may be finally working through their backlog of homes.

RealtyTrac Inc.’s figures, released Thursday, show there were 93% more notices of trustee sale than in the first quarter of 2009. This is one of the last stages in the foreclosure process before a bank repossesses a home.

“It’s possible that as banks are getting stronger and the economy is looking more solid, they’re more willing to take the potential hit to their balance sheets,” said Patrick S. Duffy from MetroIntelligence Real Estate Advisors.

Also, a variety of moratoriums in California expired at the end of September, and many of these foreclosures may have been delayed a few months.

Orange County had a bigger jump in the total number of homes in the foreclosure process, compared with the rest of California: There were 4% more homes here either foreclosed or nearing foreclosure, while California dropped by 6% statewide during the first quarter.

In total, RealtyTrac says there were 12,841 homes in the foreclosure process during the first quarter, including 1,722 that were taken back by the bank.

The spike raises concerns of a pending double-dip in the housing market, as some economists have predicted.

The news comes days after a positive report on the housing market here — March saw a 12.2% jump in the median-priced home from 2009.

“Would a higher percentage of foreclosures impact housing prices in the county?” asked Duffy, “especially at a time when interest rates are rising? Certainly.”

Meanwhile, the nation experienced its largest jump in foreclosures in five years. There were 35% more U.S. homes taken over by banks than in the first quarter of 2009.

Only a small portion of homeowners found salvage in the Obama administration’s $75-billion foreclosure prevention program. About 231,000 homeowners in the U.S. have completed loan modifications through March, 21% of the 1.2 million borrowers who began the program over the past year.