US Foreclosure Filings Surge 65 Percent

LOS ANGELES — More U.S. homeowners fell behind on mortgage payments last month, driving the number of homes facing foreclosure up 65 percent versus the same month last year and contributing to a deepening slide in home values, a research company said Tuesday.

Nationwide, 243,353 homes received at least one foreclosure-related filing in April, up 65 percent from 147,708 in the same month last year and up 4 percent since March, RealtyTrac Inc. said.

Nevada, Arizona, California and Florida were among the hardest hit states, with metropolitan areas in California and Florida accounting for nine of the top 10 areas with the highest rate of foreclosure, the company said.

Irvine, Calif.-based RealtyTrac monitors default notices, auction sale notices and bank repossessions.

One in every 519 U.S. households received a foreclosure filing in April. Foreclosure filings increased from a year earlier in all but eight states.

The combination of weak housing sales, falling home values, tighter mortgage lending criteria and a slowing U.S. economy has left financially strapped homeowners with fewer options to avoid foreclosure. Many can't find buyers or owe more than their home is worth and can't get refinanced into an affordable loan.

Efforts by government and the mortgage industry to stem the tide of foreclosures aren't keeping up with the rising number of troubled homeowners.

The April data show nearly half of the properties received an initial notice of default, suggesting many homes were new entrants to the foreclosure process.

"We're still sitting at roughly the same percentage of loans handled in any way successfully as we were a year ago, and the volume (of foreclosure filings) still keeps going up," said Rick Sharga, RealtyTrac's vice president of marketing. "It's apparent that what they've tried so far isn't working."

The U.S. House passed a bill last week that would offer government insurance on $300 billion in new mortgages to refinance loans for an estimated half-million borrowers facing foreclosure, particularly those who now owe more than their houses are worth because of declining values.

House lawmakers also passed a bill that would send $15 billion to states to buy and fix foreclosed homes.

Still, should the homeowner aid package clear the Senate, it faces a potential hurdle in the White House, which has threatened to veto the plan, arguing it's too risky and amounts to a lender bailout.

Even if a legislative compromise is reached, it could come too late for homeowners with adjustable-rate mortgages scheduled to reset to higher rates this month and the next.

More than 1 million home foreclosures are forecast for 2008.

"It doesn't look like the volume is going to slow down any time soon," Sharga said.

More than 54,500 properties were repossessed by lenders nationwide in April. In all, about 2 percent of U.S. households were in some stage of foreclosure during the month, RealtyTrac said.

Still, as foreclosed properties pile up, they add to the inventory of homes on the market and can drag down home prices. The impact is felt mostly in regions where foreclosures are concentrated, such as Southern California, the Las Vegas area, South Florida and parts of Arizona.

Nevada posted the worst foreclosure rate in the nation, with one in every 146 households receiving a foreclosure-related notice last month, nearly four times the national rate.

The number of properties with a filing jumped 95 percent versus April last year but declined 5 percent from March.

California had the most properties facing foreclosure at 64,683, an increase of 112 percent from April 2007. The number of properties declined less than 1 percent from March.

The state posted the second-highest foreclosure rate in the country, with one in every 204 households receiving a foreclosure-related notice.

California metro areas accounted for six of the 10 U.S. metropolitan areas with the highest foreclosure rates, led by Merced, with one in every 66 households receiving a foreclosure notice.

Arizona had the third-highest foreclosure rate, with one in every 224 households reporting a foreclosure filing in April. A total of 11,620 homes reported at least one filing, up nearly 181 percent from a year earlier and up 26 percent from the previous month.

Like Las Vegas and inland regions in California, areas of Arizona saw a sharp run-up in speculator-driven home prices and new home construction during the housing boom.

Florida had 35,264 homes reporting at least one foreclosure filing last month, a 146 percent jump from a year earlier and a 17 percent hike from March. That translates into a foreclosure rate of one in every 242 households, the fourth-highest in the nation.

The other states among the 10 with the highest foreclosure rates in April were Colorado, Maryland, Georgia, Ohio, Michigan and Massachusetts.

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On the Net:

RealtyTrac Inc.: http://www.realtytrac.com

Comments

[JoeBlough]

This is great news. Finally, people of modest means, who live within their means will be able to one day buy a home.
Housing prices are not really falling. They are simply returning to their proper value. Houseing prices double, but the value doesn't. All these MacMansions were over priced and the suckers lined up to buy them. Now prices are returning to true value. That is, unless the government gets involved and screws everything up again.

[chinacatsunflower]

you're right - home values/prices were over inflated for years. but here's something that's been bugging me for a while now .... .why do realtors have the power to set the selling prices?

[KBAR]

why do realtors have the power to set the selling prices?

They don't! They may help the seller try to establish a fair market value.

The ONLY way to establish a TRUE market value for TODAY is to hold an AUCTION TODAY! That's the only way.

[dadw5boys]

THE WORST IS BEHIND US SAYS THE FEDERAL RESERVE CHAIRMAN, LAST WEEK.

THE WORST FOR WHO THE HOMEOWMERS OR THE TAX PAYERS???

WE ARE THE ONES WHO ARE SCREWED; NOT THE WALLSTREET GAMBLERS!!!!!!

[thegreatgiginthesky]

The return back to sanity after years of mindless encouragement to spend coupled with people who turned a blind eye to the realities of life.

1. Giving a loan to every Tom, Dick and Harry to buy a home. Neglected the credit scores and income levels. The misnomer that sub prime mortgage rates would not rise very much.

2. People not looking at realities of life like -
a. Having a baby
b. Sickness
c. Loss of Job
d. Divorce

While I put majority of the blame on the financial instututions, the people have to have a share of the blame. Especially those who went out and brought a home that they would never be able to comfortably afford.

[Tom95134]

If you're in the middle class I don't think anyone "comfortably" affords their first home. If you're below a set income level there are many programs that can help you get into a house but for those between the cutoff point and those that can easily qualify with 20% down the majority of the middle class sets. When I bought my home just 15 years ago it was a hard first year but once I got past that things became easier. You have to do without to make sure you can pay the mortgage. Unfortunately, most who leverage themselves into their first home also spend way too much on furnishings and probably even a new car that fits into the neighborhood better.

[thegreatgiginthesky]

Why not? I understand that each of us has a level of comfort but lets face it, it does not take a genius to figure out that on 60K a year I can't afford to buy a $350,000 home. The idea is to maybe look for a home that is in the 100K range. Just because the bank approves you for a certain amount does not mean that you need to jump at it and just extend yourself to the limit.

It all goes back to living within your means. The new car and the expensive furniture are probably things that you don't really need. Getting a new car to fit into the neighborhood better is essentially the way you keep up with the Jonses. It makes no sense to even compete with your neighbor. For one, they aren't then ones who will be paying your car payment or furniture payment or home payment.

[jcranman]

Right on. Many banks new that the persons they were approving for ARMs had no expectation of an increase in wages to keep up with the increase in their mortgage payments. They intentionally said, we'll deal with that later. I know, I told them. That's how they responded. This was not neglect it was an intentional decision to ignore reality and let the chips fall. Remember, banks can't go to jail.

[conservativeoriginalist]

Ah, the virtues of a central bank owned by agenda-driven international investors coupled with an economically and monetarily ignorant Congress rears its ugly head for the umpteenth time in American history. When will we learn?

Maybe its time for the American populace to abandon the "have it now" culture and start living within their means? That'd be a novel concept.

Just about every recession and depression in this nation's history has been caused by central banks manipulating monetary policies, and yes, there were 2 separate central banks (both of which collapsed) before the Federal Reserve. And contrary to public opinion, the most significant cause of the Great Depression was not because Herbert Hoover was POTUS, but by the huge influx of on-paper wealth via the debt system controlled by the Federal Reserve, allowing people who had no business playing the markets to buy on margin, similar to today's mortgage industry's predatory lending allowing people who couldn't pay their credit cards on time to buy houses well beyond their pay grade, resulting in the housing bubble bust.

[Wiredwilly]

Absolutely. On top of that one of the designers of the Central Bank was Paul Warburg, whose brother Max was on the Board of Nazi chemical giant I.G. Farben and the Reichsbank. Between 1919 and 1945 Nazis infiltrated both the Central Banks , the World Bank, and the Government. That explains a lot. Careful investigation reveals the Central Bankers have been involved in virtually every negative phenomenon that has occurred in America since 1913 , including the Great Depression ( manipulating currency ) , WW ll ( Gold..) , the Kennedy Assassination ( John McCloy ) , 9/ 11 and the Iraq Wars ( Rockefeller ). I hope we don't have to go through World War lll before people figure out there's a skunk in the swimming pool.

[dadw5boys]

E-TRADE WILL LET PEOPLE OPEN A MARGIN ACCOUNT WITH A CREDIT CARD CHECK!!!!

[thegreatgiginthesky]

Why not hand someone a loaded pistol and ask them to play Russian Roulette