Banks in November scheduled more than 26,000 homes to be sold at California foreclosure auctions, a 63% increase from October and a sign that a surge in discounted, bank-owned properties is on track to hit the market next year.

In September I noted, Bank of America foreclosure notices increase 116%, spring 2012 rally doomed.

The uptick in scheduled auctions follows an increase last summer in homes entering the foreclosure process by receiving default notices and was largely driven by Bank of America. It appears that many of those homes are now quickly working their way through the process, said Daren Blomquist, a spokesman for RealtyTrac of Irvine, a data tracker that published the November data.

B of A is desperate. They may be too big to fail, but they aren't too big to keep hemorrhaging cash forever. Desperate for cash: BofA cuts 30,000 jobs, ramps up foreclosures

The increase played out nationally, hitting a nine-month high, even as overall foreclosure notices declined last month. Among the states, California had the biggest month-over-month increase in scheduled auctions, followed by Washington, 56%; Ohio, 53%; New Jersey, 44%; and New York, 38%. “November's numbers suggest a new set of incoming foreclosure waves, many of which may roll into the market as [foreclosures] or short sales sometime early next year,” said James Saccacio, co-founder and chief executive of RealtyTrac.

B of A is getting the timing right. If they want to sell these REOs without completely crashing the market, they need them ready for the spring selling season. Expect to see most of these homes hit the market between March and July.

Nationally, overall foreclosure filings on U.S. properties — default notices, scheduled auctions and bank repossessions — totaled 224,394 in November, down 3% from October and off 14% from November 2010. About 1 in 579 homes received a foreclosure filing last month, by RealtyTrac's tally. Celia Chen, a housing economist with Moody's Analytics, said she expected the number of foreclosures on banks' books to rise next year and for the number of discounted foreclosures on the market to remain elevated. That will continue to put pressure on home prices. “The pace of sales will remain very slow, so the share of distressed sales is going to rise most likely through the middle of next year, and this will cause home prices to fall,” Chen said. “Job growth is still weak, and then it is still a bit difficult to get those low rates. Lenders, in general, are still being pretty careful about who they write a mortgage for.”

Yes, banks now move beyond a pulse test, and they actually require a job and verifiable income. Banks will remain what realtors and others consider “tight” indefinitely because they are merely practicing good underwriting techniques — at least for now.

The West's Foreclosure Belt continued to be the hardest hit region in the nation. Nevada posted the highest foreclosure rate in the nation for the 59th month in a row, despite a decline in foreclosure activity because of a new law cracking down on those doing the foreclosing. California had the second-highest rate and Arizona the third in November.

The new law in Nevada is having an impact on the issuance of new NODs. Nevada may not post the highest foreclosure rate in the nation in a month or two, but any such reduction is temporary.

California cities accounted for nine of the 10 metro areas with the highest foreclosure rates. Las Vegas was the only city outside of California in the top 10, coming in at No. 6. Stockton posted the nation's highest foreclosure rate for the second month in a row, followed by Modesto and Fresno. In California, total foreclosure activity was up 15% from October and up 11% from November 2010. The number of homes entering foreclosure continued at an elevated level last month, down just 1% from October and up 12% from November 2010. Notices of trustee sales, or scheduled auctions, jumped 63% month over month and 14% over November 2010. Bank repossessions declined 15% from the previous month and were up 1% from the same month last year. The uptick in California filings was driven by the auction notices. When such a notice is filed at a county recorder's office, a home can be sold within 21 days. alejandro.lazo@latimes.com

The foreclosures of thousands of squatters and the liquidation of REO in California will be proceeding in earnest next year. If their past behavior is any indication, lenders will stop selling so many REO if prices start to accelerate the pace of the declines. However, if BofA is as desperate as they appear to be, they may not care what impact they have on the housing market — they need the capital to survive. This may be the end of the banking cartel.