Just a couple of years ago, home sales and prices were soaring and home foreclosures were largely out of sight and out of mind in the California real estate market, save for a niche group of investors and real estate agents.

Just a couple of years ago, home sales and prices were soaring and home foreclosures were largely out of sight and out of mind in the California real estate market, save for a niche group of investors and real estate agents. Foreclosures in that state are now reaching epidemic proportions and are very much on the radar.

Just ask Sean O’Toole, founder of ForeclosureRadar.com — the site launched in May and features interactive maps, financial tools and detailed information about preforeclosure properties, foreclosure auctions and bank-owned properties in California. ForeclosureRadar reported Wednesday that 8,716 California homes sold through foreclosure auctions in July with a loan value of $3.5 billion, up 24.6 percent compared to June.

National foreclosure data provider RealtyTrac, meanwhile, reported Tuesday that Stockton, Calif., had the highest foreclosure rate in the nation during the first half of 2007 among all of the metro areas the company tracks, and four of the 10 areas with the highest foreclosure rates are in California. The company also reported that California had the nation’s third-highest foreclosure rate among states in the first half of the year, up 232 percent compared to the same period in 2006.

And DataQuick Information Services, another company that tracks foreclosure data, reported last month that notices of default grew 158 percent in California in the second quarter of this year compared to that quarter last year, and a declining percentage of homeowners have been able to avoid foreclosure.

About 54.6 percent of homeowners in default are able to climb out of foreclosure by bringing payments current, refinancing, or selling the home and paying off the amount owed, DataQuick reported, compared with 88 percent a year ago, and the second-quarter level of default was the highest in the state since fourth-quarter 1996.

O’Toole, a licensed real estate broker who began buying foreclosure properties about five years ago, said he expects the number of foreclosures to continue to climb in California until perhaps mid-2008 before the market “normalization” process begins.

A former Silicon Valley tech industry manager with experience at startup companies, O’Toole left that industry after the dot-com crash to pursue a career in the real estate foreclosures market.

“When I started five years ago the first thing I did was start to look for better sources of information and tools to manage the business and evaluate everything that was out there,” he said. He was amazed at how low-tech some of the agencies are that provide public data on homes in a foreclosure process, he said. “Some of them were still DOS-terminal-based; others were just getting on the Web.”

He built his own set of tools to track and manage data for properties he was interested in. His coverage grew, and the volume of foreclosures in the state grew, too. “With foreclosure numbers beginning to accelerate I realized I wasn’t going to be able to buy everything,” he said, and he began to work on the creation of the Web site.

Foreclosures strike close to home for O’Toole, who bought his first house when he was 18 and got behind on payments when his first software company failed two years later.

“Fortunately I realized I needed to act quickly, so I found a good Realtor and managed to complete a short sale. The most important thing it taught me was not to overstretch,” he said.

ForeclosureRadar.com is a subscription-based service though there are some basic free tools. Users can search for preforeclosure, auction and bank-owned properties to see a short-list of properties in a given market area, though the street numbers of these properties are stripped in the free version and more advanced tools are not available.

O’Toole said he expects the site to grow in popularity among real estate professionals and private investors alike. “It became pretty obvious to me that short sales and (bank-owned or REO properties) were going to be a huge opportunity for folks, and the tools for Realtors were lousy.”

Foreclosure sales at auction now represent a significant share of all real estate sales in California, both new and resale, he said. “I don’t know if you can be in the real estate business right now and not have tools to watch foreclosures.”

Subscribers can search for properties using dozens of criteria, such as stage of foreclosure process and specific reasons for postponement of a foreclosure auction, as examples. The site incorporates automated value estimates supplied by Zillow.com, and features updated information on foreclosure auctions throughout the state.

A calculator tool allows subscribers to gauge possible profits if the property requires repairs and is flipped or rented, and users can also upload photos and add notes about specific properties they are interested in. There are also statistical tools to help subscribers identify foreclosure trends.

There are plans to add new features this month to allow subscribers to save and export information they find through searches, O’Toole said.

Despite some technology advances, gathering foreclosure data for the site is still a labor-intensive process, O’Toole said. There are an estimated 1,000 foreclosure auctions throughout the state, everyday, he said, and the goal is to track the dates for those auctions and to report on the outcomes as soon as possible.

He wouldn’t elaborate on some of the details of the “secret sauce” that the company uses to gather its data. “It’s a matter of aggregating all the different sources and adding your own manual labor to fill in the gaps.”

While the public may have the perception that it’s cheap to gather public data on foreclosures, the reality is that “the costs associated with gathering it are just astronomical,” he said.

Noel Jaimes, a real estate broker who has worked with foreclosure properties in the La Mirada, Calif., market area for about eight years, was an early adopter of the ForeclosureRadar.com Web site.

“I call it a farming tool,” said Jaimes. “If companies are filing notices of default today, tomorrow morning I’ll know exactly which properties.”

The foreclosure market is “competitive in the sense that everybody’s chasing the same information,” Jaimes said, which makes it particularly important to get that information as soon as possible.

The Web site has saved him some door-knocking, Jaimes said, as he can narrow the list of properties he wants to focus on before he goes out in the field.

“It’s easier finding the ‘diamonds’ now than it used to be.” Jaimes said he has tried other services that provide foreclosure information, too. “With other services that are out there unfortunately you have to dig a little deeper.”

The ease of the online tools has also expanded his service area. “I can now go almost anywhere within 50 miles of my home base and do business,” Jaimes said.

While he said the foreclosure problem may not yet match the market conditions that the state experienced in the early 1990s, he added, “My personal belief is the market’s going to get worse for the next two to three years before it can get better.”

O’Toole said that there will likely be some hikes in foreclosure filings as large volumes of adjustable-rate mortgages are scheduled to reset — significant reset periods are approaching in October 2007 and March 2008, he said.

Some of the most intense foreclosure activity has been in markets where people left in order to move into more remote, high-growth areas with newly built subdivisions, O’Toole said.

The rush of foreclosures in the state caught many people by surprise, he said. “I don’t think anybody necessarily saw it coming all along.”

O’Toole said he backed off in his own purchases of foreclosure properties in 2004 believing the market was headed for a correction at that time. But booming sales continued, and he hopped back into the market. “Coming into the end of 2005 I had a lot of inventory and started to get a little concerned again,” he said, and he began to sell off his inventory of properties.

His advice to those facing foreclosure: “Take action as soon as you suspect you might be in trouble. Don’t wait for the foreclosure notice, or even until you’ve run out of money and can’t make the payment. Don’t be afraid to ask for help from a Realtor and from your lender. The sooner you come up with a plan the better your odds are of a good outcome.”

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