March 2, 2011

California Home Foreclosures Fall 31%

Author: admin - Categories: California Hotel Foreclosures, California Real Estate News

According to figures released today by DataQuick, the number of California homes seized by lenders fell 30.6% in 4th quarter of 2010. Over all, home loan lenders foreclosed on 35,431 homes between October 1st and December 31st.  This was down from over 51,000 in the 4th quarter of 2009.

In addition, DataQuick reported:

  • Default notices issued to homeowners who have missed at least 3 loan payments dropped 17.5% in the 4th quarter of 2010 to 69,799 notices compared to the 4th quarter 2009 when mortgage lenders issued 84,568 default notices.
  • Last quarter’s number of defaults was the lowest in more than three years, the result of shifting market conditions and changing policies on servicing home loans.
  • Least amount of  loan defaults issued by mortgage lenders since the 2nd quarter of 2007, when there were less than 54,000 defaults.
  • A high percentage of loan defaults were originated between 2005 to 2007.
  • Loan modification applications feel 24% in the 4th quarter.

The lenders issuing the most loan default notices in California: Bank of America (16,199) and Wells Fargo (10,287)

DataQuick President John Walsh said: “We don’t know how much of the decline is due to less household financial distress, and how much is due to shifts in lender and servicer foreclosure policies. The level of default activity would certainly be higher if it weren’t for alternative strategies such as short sales, or even lengthening grace periods. The institutions that hold these loans in their portfolios will do whatever it takes to lessen their losses, including waiting.”

January 8, 2010

California Hotel Foreclosures Rise

Author: admin - Categories: California Hotel Foreclosures

Hotel foreclosures in California more than quadrupled last year as business travelers and vacationers cut spending and commercial real estate values plunged, forcing owners into default, according to a survey released today.  There were 62 foreclosures on hotels in the state last year, compared with 15 in 2008, Irvine, California-based Atlas Hospitality Group said in a statement. Properties in default jumped almost six-fold to 307, said Atlas, which specializes in selling hotels. The survey only covered California.

Lodging owners are struggling to make debt payments after adding rooms and properties from 2004 to 2007, when financing was easy to come by because banks bundled the loans into mortgage-backed securities and sold them to investors.  “In California and nationwide, a lot of owners are dipping into their own pockets to fund the negative cash flow, and they are running out of money,” Alan Reay, president of Atlas Hospitality, said in a telephone interview. “Hotels are being foreclosed on and reselling at very low, low prices. A lot of people question if they should keep paying. As bad as the numbers look right now, it’s going to get a lot worse.”  About 1,200 loans totaling $28.2 billion and backed by 1,800 U.S. hotels were included on a performance watch-list by Realpoint LLC as of the end of December. The list includes loans in default or at risk of default, according to the Horsham, Pennsylvania-based credit-rating company.

The largest hotel to be foreclosed on was the 469-room Marriott in downtown Los Angeles, Atlas said. The Marriott International Inc. hotel may be sold to an unidentified Chinese investor for $60 million in cash, industry newsletter Real Estate Alert said last month.  LA Hotel Venture LLC, which bought the property for $115 million in March 2007, filed for bankruptcy in April to stave off foreclosure. The petition listed as much as $100 million in assets and as much as $500 million in debt.

About 81 percent of troubled California hotel loans originated between 2006 and 2007, Atlas said.  Occupancy in the top 25 U.S. travel markets fell to 61 percent through November from 67 percent a year earlier, according to Smith Travel Research in Hendersonville, Tennessee.  Average daily rates slumped 12 percent during that period compared to the prior year and will likely drop 3.4 percent in the U.S. in 2010, according to Smith Travel.  “We’re not going to hit bottom until we stop seeing revenue declines,” Reay said. “The latest November numbers still show double-digit declines in many of the top 25 markets. That’s a problem. We were looking at November as the bottoming- out month. Unfortunately, this was a bad surprise.”  Riverside, California, outside of Los Angeles, had 10 hotels in foreclosure last year. San Bernardino was home to seven and Los Angeles had six, Atlas said. Los Angeles had 33 hotels in default and San Bernardino had 30, Atlas said.