Foreclosures Jump 79 Percent In 2007

More Expected In Coming Months; Nevada, California, Michigan, Ohio And Florida Top List

(CBS/AP)  The number of U.S. homes that slipped into some stage of foreclosure in 2007 was 79 percent higher than in the previous year, a real estate tracking company said Tuesday. Many homeowners started to fall behind on mortgage payments in the last three months, setting the stage for more foreclosures this year.

Ohio was among the top ten states for foreclosure filings during 2007.

About 1.3 million homes nationwide received foreclosure-related warnings last year, up from 717,522 in 2006, Irvine-based RealtyTrac Inc. said. Foreclosure filings rose 75 percent from the previous year to 2.2 million.

More than 1 percent of all U.S. households were in some phase of the foreclosure process last year, up from about half a percent in 2006, RealtyTrac said.

Nevada, Florida, Michigan, California and Colorado posted the highest foreclosure rates, the company said.

Ohio ranked sixth, with 1.8 percent of the state's households entering some stage of foreclosure last year. Ohio had 153,196 foreclosure filings on 89,979 properties, up 88 percent from 2006, the report said.

The filings included notices warning owners that they were in default, or that their home was slated for auction or for repossession by a bank. Some properties may have received more than one notice if the owners had multiple mortgages.

The toppling housing market has given way to a spike in mortgage fraud cases. CBS News has learned that the FBI has 1,210 open cases, a 50 percent rise from the fiscal year 2006.

The FBI is also seeing a trend in an increase of foreclosure scams. While they have no hard numbers of cases right now, they are seeing evidence of scams including: Phantom help (people promising to help get people out of foreclosure for a fee); Bait and switch (promises of refinancing to get out of foreclosure results in the victim turning their homes over to the scammers); and bail out scams (where the scammers quickly get the deeds from people through false promises of help), reports CBS News.

A late-year surge in the number of U.S. properties reporting foreclosure filings suggests that many are in the initial stages of the foreclosure process and could end up lost to foreclosure this year unless lenders or the government steps in, RealtyTrac said.

"It does appear that we're seeing a new batch of properties enter the process," said Rick Sharga, RealtyTrac's vice president of marketing.

RealtyTrac is forecasting that the pace of foreclosure filings will remain steady, rather than accelerate during the first half of 2008.

"Assuming nothing else bad happens economically ... we will have exhausted the bulk of the worst-performing loans by the end of June," Sharga said, referring to adjustable-rate mortgage loans made to borrowers with poor credit.

Many of these subprime loans defaulted last year, triggering a credit crisis and saddling major financial institutions with losses.

More than 1.8 million subprime mortgages are scheduled to reset to higher interest rates this year and next.

Last year's explosion in foreclosure activity came amid a worsening housing downturn, as falling home values ate into homeowners' equity, making it harder for many to refinance into more affordable loans or to find buyers. Those options had helped keep troubled homeowners from sliding into foreclosure.

"We went from a sort of buying frenzy to a foreclosure frenzy in the last two years," Sharga said.

Recent efforts by government and mortgage lenders to help homeowners at risk of falling seriously behind on mortgage payments have had a marginal impact on the U.S. foreclosure rate so far, Sharga added.

In December alone, foreclosure filings soared 97 percent from the same month a year earlier to 215,749. It was the fifth consecutive month in which foreclosure filings topped more than 200,000, RealtyTrac said.

In the fourth quarter, filings rose 86 percent from the prior-year quarter but only 1 percent from the third quarter.

Nevada had the highest foreclosure rate in the nation last year, with 3.4 percent of its households receiving foreclosure filings. That was more than three times the national average, RealtyTrac said.

The state had 66,316 filings on 34,417 properties in 2007, up more than 200 percent from 2006's total.

Florida had more than 2 percent of its properties in some stage of foreclosure last year. The state reported 279,325 filings on 165,291 homes, more than twice the previous year's total.

In Michigan, where job losses are pressuring many homeowners, 1.9 percent of all households received a foreclosure filing last year. In all, 136,205 filings were issued on 87,210 properties, up 68 percent versus filings in 2006.

California led the nation in total foreclosure filings and the number of homes in some stage of foreclosure last year.

A total of 481,392 filings were issued on 249,513 properties, more than triple the number of filings in 2006, RealtyTrac said.

In all, 1.9 percent of households in California received foreclosure filings.

In Stockton, there have been more foreclosures than any other city in the country, reports CBS News affiliate KPIX-TV in San Francisco.

Police are investigating a rash of car fires and whether people setting the blazes themselves as a way to make some fast cash off their insurance policies.

Many of the homes receiving foreclosure filings in the state were in the inland markets, where new construction and more affordable prices helped fuel a spike in sales toward the end of the housing boom.

Other states in the 2007 foreclosure top 10 were Georgia, Arizona, Illinois and Indiana.

[ianlou]

I''ve got to shake my head when I hear Europeans are concerned about their markets being dragged down by the problems being faced by the American middle class as they all enjoy a work schedule that only school teachers in America receive.

I''ll make sure to take a moment during one of my three weeks off this year to not give a *****!!!

[ianlou]

sophielhu, Go advertise somewhere else.

[ianlou]

Looking at the top foreclosure states (Nevada, California, Michigan, Ohio And Florida) , the reasons are different:

California and Florida homes are so expensive that people who could easily afford a house most anywhere else in the country had to use Sub Prime Jumbo loans to simply own a roof over their heads.

Michigan and Ohio homes were always affordable, homes here are falling into foreclosure because the manufacturing jobs in these states are going, going almost gone.

I don''t understand Nevada, maybe it''s citizens can''t resist gambling.

[sophielhu]

"I cannot believe the federal government is willing to help bail out some people because they cannot make their mortage payment..."
-----------------------------------------------
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[rhs648]

The banking industry and Wall Street have done to our worldwide financial reputation what Bush/Cheney have done to our political and human rights reputation. Watch what other nations and their central banks say next time US banks want to sell them bonds or securities: "NO THANKS!"

Posted by gce65

That might satisfy people who worry that foreign interests are buying too much of America.

[gce65]

The banking industry and Wall Street have done to our worldwide financial reputation what Bush/Cheney have done to our political and human rights reputation. Watch what other nations and their central banks say next time US banks want to sell them bonds or securities: "NO THANKS!"

[rhs648]

"I cannot believe the federal government is willing to help bail out some people because they cannot make their mortage payment..."

Posted by bonefish53

bonefish53 - I agree with much of what you say. Unfortunately, there are too many irresponsible people out there. I do not buy the idea that people are unsophisticated or naive and didn''t know better. However, there is a bigger picture. The forclosure fiasco could lead to major economic problems for our country if not the world. We are probably six months into a recession. If it gets worse, we could see major unemployment, people losing their savings and investments, etc. Unfortunately, many innocent people who did not get involved with these subprime loans will be hurt as well. It would be nice if we could force the realtors, banks, and mortgage companies, and brokerage firms responsible for this mess to forfeit their profits. This we will not see. Keeping people from having their homes forclosed is part of an attempt by our government to prevent a much deeper recession from occuring. Will this work? Only time will tell.

[rhs648]

ralphj53 - You present some good arguments. The one that confuses me is the war in Iraq. Please explain your thoughts. I''m not arguing, I just want to hear your thoughts on this.

[ralphj53]

January 29, 2008
Hello;

Many years ago, (about fifteen years ago.) I would read in the papers (Real Estate Section) about a three bedroom, one bath home in Paramount, California, selling for about $209,000.00

I kept thinking, WHERE in the world are these people getting this much money to buy a home? In 1994, I bought my two bedroom, and a den home for just $34,000.00 CASH... and ONLY because I IHERITED about $81,000.00

I used to think.... what are these people THINKING about? I know since the lottery became LEGAL... AMERICANS have had this syndrome of "instant gratification", without having to work hard and save their money for a rainy day.

And that WAR in IRAQ doesn''t help either.



As AMERICANS.. everyone knows that the average AMERICAN working man has the LOWEST savings rate in the world.
The Japanese may have the highest. You see, you can''t "take from PETER to pay PAUL". Because PETER obviously has to take care of his own family ....ALSO.

And so, we LEAN on CONSUMER CREDIT. And the poeple lending you the money to buy that house, also have to take care of THEIR families. And so, that VICIOUS cycle STARTS to rear it''s ugly head.

That is UNTIL mistakes COMMITED in the PAST are NOW falling DUE to be PAID for........ TODAY.

MAYBE.... by way of RECESSION. It''s like taking CASTOR OIL. It tastes "ugly" but it''s good for you.

thanks,
rjm

[donbl1]

Bonefish, I understand your point about bailouts but there is an exception:

There were some people who ended up with more house and more "variable" loan than they could afford. These folks were normal "wanting" Americans but they did not have the sophistication to understand their risk.

Now, they are upside down on the home (California/Florida/others) with an adjusted higher interest rate than they can carry.

So, they might lose their down payment, what they have paid into the house and their credit rating.

I feel for "that" group of people. I do not feel for the flippers or those adequately educated to know what they were doing. Those people were just plain guilty and knew what they were doing.

[waynabq]

Chimp says the economy is doing GREAT!!!, so don''t you worry about it. Bring it on and Mission Accomplished!!! Yee-Ha. Viva Bush!!!

[hypnotoad72]

bonefish53 - I cannot believe the federal government is willing to stand by and let offshoring and gruesomely high energy costs let people suffer.

Don''t get me wrong: I am not dismissing your point of view.

But I fear you are willfully ignoring other, very relevant issues. I believe there''s a lot more going on than either those in debt... or the bankers... fiddling around.

Last I checked, people are losing jobs and companies downsizing. If people had 200k in the bank, they sure as he!! wouldn''t need a freakin'' loan either.

Without jobs, people cannot spend the money. Without companies getting the money, they lose. As a result, they fire jobs.

It''s a vicious circle. And offshoring is proving not to be much help in that regard. Everybody is losing right now; from those with loans to the employers to the banks to our government to other governments to their stock markets.

What part of "everybody" can''t you contemplate?

[waynabq]

Why are dumb "Liberals" complaining, just because Bush doubled our national debt to 9 trillion, lied about WMDs to start a war that''s literally killed a million people at a cost of $600 billion and climbing, legalizing torture and warrantless wiretaps, did such a marvelous job during Katrina, committed treason by exposing a CIA undercover agent, lied about Iraq''s (non)involvement in the 911 attacks, vetoed a health care bill not once but twice to expand health coverage to six million American children, hey you dumb Liberals, what is the big freakin'' deal?

Don''t you liberal fools know, Bush never got a BJ from Monica, sheessh...are you Liberals stooopid!!!

[j-whitman]

I''ve heard there is already over 600,000 new filings this year & it''s just started.

[waynabq]

Affordable housing is the foundation that allows our country to have a middle-class. Affordable housing is no where in sight for the average working American.
I guess the Reagan/Bush/Conservative fiscal, tax policies that have created more millionaires/billionaires than ever haven''t helped the average working American much has it?
The trickle down theory of economics ain''t working too good. But I guess the very people who voted for Bush are getting what they deserve, foreclosure.

[feelfree1]

Fortunately, regular readers of this site were alerted to this inevitability many months ago, and had an opportunit to prepare for it.

They were alerted not by CBS Newz, of course, but by many of those who provide their own analysis on this topic, on this site, right here in the "comments" section.

Good job!

[bonefish53]

I cannot believe the federal government is willing to help bail out some people because they cannot make their mortage payment. i can understand a first time home buyer in the price range of no higher than maybe 200 to 250k. however i just saw a piece on tv that showed a husband and wife crying because they may lose their house due to a $2100 a month payment. the house was at least a four bedroom with 2 baths, large kitchen, family room, etc. can someone please help me understand why i should feel sorry for them? why did they have to buy such a big house to begin with? i didn''t. i bought what i could afford. nobody is helping me with my payments. let them lose their house and mov into something they can afford. this country is really making me sick. there is no accountability anymore. it''s always someone else''s fault. grow up already.

[rudy654-2009]

Posted by FloydZepp at 06:04 PM

You got that right about the so-called free market. They made sure that the little guy had no access to the free market. It was designed for only the powerful corporate structures. No little guy can just come into this country and start selling his wares. Nor can some little guy from here go there and sell his wares. But if you are multi-billionaire corporation, the market is your candy shop.

[rudy654-2009]

Posted by jjmoss4 at 04:55 PM

Isn''t funny how no one in the government stood up for the people in the matter of the credit cards and bankruptcy? I mean, the credit companies all gave out millions of dollars to buy the votes from Congress, and those same representatives and senators act like they did nothing wrong. There really is a lot of blame to share among all of the creeps. Limbaugh just loves how it has all worked out.

[mcvet]

I wish our country would get a clue on what has contributed to our families being in trouble--it''''s the reform of the bankruptcy laws of 2005! No one mentions this, but because the formula for repayment is so tight, families are choosing to give up their homes because they can''''t make the payments this plan requires. We had to claim chapter 13 in 2006 after medical bills from cancer and other expenses ate up our credit cards. A financial company was supposed to "take care" of our debt but did not, so no payments were made for four months, leaving us no recourse but to take a chapter 13. My husband and I both work full-time and because of this crazy "formula" we were allowed to keep our home but make a very large payment, more than we can afford, to the court each month, in addition to our house payment. to pay lawyers and credit card companies. I have a son going to college in a year and there is no way to have extra money for this due to our chapter 13 payment. PLEASE do a story on how this affecting Americans. Thank you.




Posted by jjmoss4 at 04:55 PM : Jan 29, 2008
+ report abuse

You are absolutely and rest assured we will be reminding American''s of this fact EVERY day from now until the walk into the voting booth...