LA foreclosures back up again in November

NEW YORK (Reuters) - Los Angeles home foreclosures rose again in November despite the implementation of a new California state law, while foreclosures in Miami grew at a much slower rate, real estate research firm PropertyShark.com said on Wednesday.

The number of newly scheduled auctions on foreclosed properties in Los Angeles county rose 51 percent year-over-year and 54 percent from October to 3,685 after falling by half from September to October.

The law, passed on July 8, requires lenders to contact homeowners and explore options during a 30-day waiting period to avoid foreclosure before initiating the process.

"The California foreclosure law that went into effect in September seems to only have delayed the problem by 30 days," said PropertyShark.com Chief Executive Bill Staniford.

Foreclosures are at the heart of the slump afflicting the U.S. housing market, its worst since the Great Depression. The boom that peaked in 2006, fueled by speculation and lending to risky subprime borrowers, was followed by a bust as those borrowers began to default on their mortgages.

Miami, where subprime lending, speculation and overbuilding were common especially in the beachfront condo market, saw towering price spikes, steep declines and a surge in foreclosures.

In November, new auctions in Miami were up only about 6 percent to 679 from a year ago, but down by 21 percent from October.

Staniford said he would have to wait for another month of data before he could call this a trend in Miami, which has experienced recent similar volatility.

If the numbers reflect a decrease in foreclosures because the riskiest subprime borrowers, who truly could not afford their mortgage, have lost their homes, then the decrease in Miami could have some traction, Staniford said.

However, if the broader economy continues to weaken, causing job losses that result in more defaults and foreclosures, then Miami's numbers will likely go back up again.

"I can't even say I'm cautiously optimistic, I'm just cautious," he said. "We're in a sort of wait and see period here."

(Reporting by Helen Chernikoff; editing by Richard Chang)