State foreclosure sales hit record high

More than 1,000 California properties went up for sale in foreclosure auctions each weekday in April, a foreclosure data company said Tuesday, staking a grim new milepost for the state's beleaguered housing market.

Last month's foreclosure auction sales totaled 22,838 statewide, according to ForeclosureRadar.com, a Discovery Bay company that provides information about such sales to subscribers. That's an average of 1,038 sales for each business day in April, said company president and founder Sean O'Toole.

In Santa Clara County, 500 properties were offered at foreclosure auctions in April, up 47 percent from March 2008, and up 585 percent from April 2007. In April, the county ranked 40th among California counties in terms of foreclosure sales per county population, according to ForeclosureRadar.

The majority of these auctions - which typically take place outside courthouses or other public venues once a foreclosure becomes final - ended with the foreclosing mortgage lenders repossessing the properties because no third-party bidders offered to buy them.

O'Toole said despite the fact that lenders are frequently offering big discounts at the courthouse-steps auctions, 98 percent of foreclosed properties in April failed to find buyers at auction, so the lenders had to take ownership. Once that happens, the properties become known as "REOs," for "real estate owned" by banks and other financial institutions, which

then try to sell the homes through real estate agents who list them on local multiple listing services.

Statewide, the average discount offered at auction was 25 percent off the value of the mortgage being foreclosed upon. That means that if the previous homeowner had a mortgage balance of $400,000, the lender might start the initial auction bidding at $300,000.

Merced County had the most foreclosure sales per capita, and Del Norte County had fewest.