Home Foreclosure Rates Spiking

(CBS/AP)  Homeowners across the U.S. are increasingly having trouble making their mortgage payments on time, but borrowers in metro areas of California, Florida and other once-booming housing markets are accounting for the biggest spikes in foreclosure filings, according to a mortgage research company.

An analysis of foreclosure activity in the nation's largest 100 metropolitan areas during the three months ended Sept. 30 shows seven cities in California and five each in Florida and Ohio were among the top 25 metro areas with the highest foreclosure rates, according to the study being released Wednesday by RealtyTrac Inc.

The Irvine-based company calculates its foreclosure rate ranking by comparing the number of households in a metro area with the number of foreclosure filings, which include notices of default, auction sale notices or bank repossessions.

Stockton, about 83 miles east of San Francisco, had the highest foreclosure rate in the third quarter among the top 100 metro areas, with one foreclosure filing for every 31 households, RealtyTrac said.

Detroit was second, with one foreclosure filing for every 33 households. The Riverside-San Bernardino metro area, located about 60 miles east of Los Angeles, was third, with one filing for every 43 households.

Riverside-San Bernardino also accounted for the most foreclosure filings in the U.S. during the quarter, RealtyTrac said.

The housing market slump has made it harder for financially strapped homebuyers to sell their homes and avoid missing payments or losing their homes in foreclosure. Increasingly, many borrowers who took out adjustable-rate mortgages and other loans that potentially adjust to higher monthly payments after an initial period are also finding they can't afford their payments.

Once-booming areas, such as California's Central Valley, where Stockton is located, and the neighboring counties that are home to Riverside and San Bernardino, are also mired now with a glut of new and resale homes.

"What happens there is you have your basic economic imbalance between supply and demand," said Rick Sharga, vice president of marketing for RealtyTrac. "It exacerbates the problem for people who are on the verge of default."

Stockton had 7,116 foreclosure filings on 4,409 properties during the quarter, an increase of more than 465 percent from the same quarter a year ago, the company said.

The Detroit metro area, which includes Livonia and Dearborn, reported 25,708 filings on 16,079 homes, up more than 93 percent from the same quarter last year. It had the third-highest number of filings during the quarter.

Riverside-San Bernardino, meanwhile, had 31,661 filings on 20,664 properties, a jump of more than 267 percent from the year-ago quarter.

Fort Lauderdale, Fla., was ranked fourth, followed by the Las Vegas-Paradise metro area.

In Fort Lauderdale, one in every 48 households was in foreclosure, up 127 percent, reports CBS News correspondent Kelly Cobiella.

The foreclosure spikes are even affecting Levitt and Sons, the company that founded Levittown and helped popularize the American suburb. The company is facing bankruptcy and blames its troubles on a housing glut, the mortgage crisis and skittish buyers.

Retirees Angelo and Paula Palermo were supposed to be closing on their Levitt home in Port St. Lucie, Fla., this winter, reports Cobiella. Instead they're living in a one bedroom apartment, waiting to see if their builder can survive.

"This was our last move, I swear," said Angelo Palermo. "I said to my wife, this is where we will die."

But the Palermo's development and more than 30 others across the southeast are on hold, and some 600 customers, many of them retirees, with $18 million in deposits are in limbo, reports Cobiella.

The California metro areas of Sacramento, Bakersfield and Oakland were also among the top 10 metro areas with the highest foreclosure rates, garnering the sixth, ninth and 10th spots, respectively.

A metro area in Ohio composed of Cleveland, Lorain, Elyria and Mentor was ranked seventh. Miami was ranked eighth.

Los Angeles had the second-highest number of foreclosure filings during the quarter with 29,501 on 18,043 homes. The city's foreclosure rate was one filing for every 113 households, or 26th overall.

Some metro areas, including Baton Rouge, La., McCallen-Edinburg-Pharr, Texas, and Greenville, S.C., saw foreclosure filings drop during the quarter.

Borrowers in Detroit and other metro areas in the Midwest that have been hard-hit by job losses generally were receiving late-stage foreclosure filings, such as notices of auction or bank repossession, Sharga said.

"That just speaks to the underlying weakness in those areas," he said.

Dave Webb, co-owner of Hudson & Marshall, a foreclosure auction firm based in Dallas, said most of the properties being auctioned by his firm in inland areas of California are investment properties that ended up being repossessed by lenders after the market tanked.

"What I'm selling this week - 700 homes in the Stockton-Oakland area - these properties were probably foreclosed a good year-and-a-half ago," Webb said.

The properties that end up in foreclosure now, however, will likely be homes bought by first-time buyers and others with adjustable rate mortgages due to reset to higher monthly payments, he said.

"You'll see when we come back late next year," Webb said. "It will be mostly owner-occupied homes."

[myxomycota]

Why are so many people blaming politicians.... Most (not all) of these foreclosures were because a lot of people got greedy. Banks wanted to make a quick buck,lenders wanted all that interest, homeowners wanted the biggest house on the block.. and then it collapses.... both sides are to blame for this mess. Banks should have been more stringent with thier loans and buysers should have sat down with a calculator to see if they could even afford the house they want. If you couldn''t understand the contract (Sub-prime ARM''s) then hire a financial advisor for a few hundred dollars to help you see what you are really getting into.

I am in the process of buying a house now, I''m 31, been renting and saving for about 6 years to be able to afford 20% down, and my loan is fixed and less than my annual income. Easy rules to live by, but only if you actually want to live within your means.

And to all the "speculators" and "flippers" that got hammered in this.... remember that house or "investment" as you called it, is like any other investment, stocks go up, stocks go down, so quit crying and take the loss.

[megaprophet]

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[megaprophet]

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If he is elected President, Ron Paul will work to abolish the Federal Reserve System as well as the IRS, returning our country to the Gold Standard. He believes, as I do, that our current Income Tax System is unconstitutional, because it is a direct tax that is not equally apportioned as The Constitution requires. Whenever taxes are raised by the federal government, it should be done as The Constitution does require--in an indirect way, which is equally apportioned. This system would benefit all of us, creating more individual wealth, and allowing us to make more decisions for ourselves about our lives. As President, Ron Paul will also work to abolish the Federal Reserve, a group of private banks, run by unelected officials, which loans our government unbacked money which they are allowed to essentially print out of thin air, making each dollar in your pocket worth less all the time, and increasing our national debt to these banks. Worse still. Most of our debt is owned by China (25%) and Saudi Arabia who finance our runaway military spending overseas. This is a threat to our nation. We need to bring our troops home from overseas, and use the trillions we would save thereby to reduce our debt, and to re-invigorate our currency. We can use this money to ensure that Social Security and other essential programs will still be solvent in the future. Vote for Ron Paul. He''s published three books on the topic of sound economics. ronpaullibrary.org

[megaprophet]

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[megaprophet]

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[hkihega]

I wonder if the housing market wouldn''t have taken such a big tumble if the media would have kept their mouth shut. You control the media, you control the world!
What gets me is this, if you owe 150k on your house, someone offers you 147k the banks says no you can''t pay out the remaining balance of 3k and we are going to foreclose, they end up selling it for 125k so now you owe us 25k instead of 3k!! Put that in your pipe and smoke it!

[brianbwb-2009]

No offence, but some upgrading in economics would be in order supply -demand are the chief denominaters in setting market pricing .
Posted by jankebenz

Then why are gas prices highest in San Diego, considering that gas supplies are uniform over the US? Because the prices are colluded to force the highest price that the market in that area can possibly bear. LA is only two hours north, with a lot more cars, (higher demand) but the gas price is lower. Same for electric power, foodstuffs, and many other essential items.

Collusion is the chief denominator. Notice that gasoline prices track exactly when the crude price rises, but lag far behind any drop in crude prices (I admit it has been a long time since we''ve seen a drop, but check back, its there.)

[jetranger7]

NO Need to Worry about your homes now, the Politicians in Washington have a plan, their going to get us involved in a Nuclear War with IRAN, RUSSIA, CHINA and anybody else, this way they can wipe out the Civilian population and start from scratch, with only a few Rich people who have concrete bunkers, just a matter of time, if you read the article on what Russia is doing with their missles, and then we''ve got CHINA trying to poision us to death, and the banks and finance companies throwing everybody out of our homes, Yip you''ll wake up one morning to see a bright red glow out your window, and a lot of Heat, then its bye, bye, you''ve just been NUKED !!

[jankebenz]

The theory you posit was taught in fourth grade civics class, while the students only look out the window at the gas pump to see the inaccuracy of such dangerous misinformation

Posted by brianbwb at 01:52 AM : Nov 15, 2007

No offence, but some upgrading in economics would be in order supply -demand are the chief denominaters in setting market pricing .

[jetranger7]

Hey, if your in trouble, just get on the phone and call ol'' Richard Cheney over at the WH, he''s got money, he could help us all out of a jam !!!!! and ol'' George too !! But I thought I definetly remember them saying that this war would pay for itself from the IRAQI Oil revenues they retrieve ??? Doesn''t help much that this adminstration and the previous other 2 adminstrations allowed many US Companies to relocate and outsource many American Jobs to some foreign country ! Well its over - OFFICIALLY - America is over as we know it, these Corrupt politicians have sold us down the drain for so many years Thanks to Big Corportations and their Fraudulent lobbying efforts, that now were all going to suffer for decades to come, you, your kids, kids, Yip DOOM and DISPAIR is here, and theres NO ging back now, its OVER ! Bye America,you''ve been SOLD-OUT by Corrupt Politicians many decades over, your history, You were once a good thing. Thank-You ! Now let the Revolution begin and the Hangings take place right on the White House Steps, get those traders !