Foreclosure Filings Nearly Double - Illinois Among Top 10 as Midwest Hit Hard
|November 30, 2007|
LOS ANGELES - U.S. foreclosure filings nearly doubled in October from the same month last year, the latest sign that many homeowners are falling behind on mortgage payments and increasingly losing their homes, according to a mortgage research company.
A total of 224,451 foreclosure filings were reported in October, up 94 percent from 115,568 in the same month a year ago, Irvine, Calif.-based RealtyTrac Inc. said Thursday. The number of filings in October rose 2 percent from the September level.
The U.S. had one foreclosure filing for every 555 households in October, RealtyTrac said. The filings include default notices, auction sale notices and bank repossessions. Some properties might have received more than one notice if the owners have multiple mortgages.
Although the number of filings is still up year-over-year, it has leveled off in the last two months after hitting a high for the year in August.
Efforts by lenders under pressure to modify loan terms for at-risk borrowers could explain the slower sequential increase in filings but the trend is likely more a result of a lag in filings after interest rate changes on adjustable-rate mortgages, said Rick Sharga, RealtyTrac's vice president for marketing.
It typically takes two to three months after a rate reset before a borrower who fails to make payments is considered in default.
Tighter lending standards and the housing slump are making it harder for homeowners who cannot afford their mortgage payments to sell their homes or refinance.
Many homeowners with adjustable-rate mortgages are also facing steep monthly payment hikes. Experts estimate some 2 million of the loans are due to reset at higher rates in the next eight months, which could lead to more foreclosures.
One alarming trend in October was an increase in the number of homes that were repossessed by lenders after they failed to sell at trustee auctions.
"About 35 percent of the total filings we collected this month were notices of bank repossession," Sharga said. "Historically, on average, that number is more like 20 percent."
The trend was particularly evident in Ohio, where 45 percent of all foreclosure filings during the month were notices of bank repossessions. The repossessions represented 46 percent of all filings in Missouri and 37 percent in Michigan. Economic woes and job losses have exacerbated the housing slump in the Midwest.
Nevada, California, Florida and Ohio had the highest foreclosure filing rates, RealtyTrac said. Rounding out the states with the top 10 foreclosure filing rates in October were Georgia, Michigan, Colorado, Arizona, Indiana and Illinois.
Source: Associated Press