U.S. Foreclosure Rates Continue Climb

(AP)  The number of homeowners ensnared in the foreclosure crisis grew by more than 70 percent in the third quarter of this year compared with the same period in 2007, according to data released Thursday.

Nationwide, nearly 766,000 homes received at least one foreclosure-related notice from July through September, up 71 percent from a year earlier, said foreclosure listing service RealtyTrac Inc.

By the end of the year, RealtyTrac expects more than a million bank-owned properties to have piled up on the market, representing around a third of all properties for sale in the U.S.

That's bad news for anyone who lives nearby and wants to sell their home. While foreclosure sales are booming in many areas, those properties are commanding deep discounts and pulling down neighboring property values. "It has a pretty significant impact in terms of pricing," said Rick Sharga, RealtyTrac's vice president for marketing.

RealtyTrac monitors default notices, auction sale notices and bank repossessions. More than 250,000 properties were repossessed by lenders nationwide in the third quarter, 81,000 of which were taken back last month.

Six states - California, Florida, Arizona, Ohio, Michigan and Nevada - accounted for more than 60 percent of all foreclosure activity in the quarter, with California alone making up more than a quarter of all U.S. foreclosure filings.

Detroit and Atlanta were the only cities outside California, Florida, Nevada and Arizona to make RealtyTrac's list of the 20 hardest-hit metropolitan areas.

The combination of sinking home values, tighter mortgage lending criteria and an economy that many economists think has already slipped into recession has left hundreds of thousands of homeowners with few options. Many can't find buyers or owe more than their home is worth and can't refinance into an affordable loan, with the global credit crisis making loans far less available.

For those who can qualify for a loan, or have cash to invest, there are bargains to be had, especially in ravaged markets like Nevada and California. Last month, foreclosure resales accounted for more than half of existing home sales in California last month, as home sales jumped 65 percent from a year ago, while the statewide median home price fell 34 percent to $283,000, according to MDA DataQuick.

RealtyTrac, however, reported foreclosure filings in September were actually down 12 percent from August. But much of that decline was the result of new state laws that delay the foreclosure process. In California, for example, lenders are now required to contact borrowers at least 30 days before filing a default notice. A similar law in North Carolina gives borrowers an extra 45 days.

Still, that's not likely to be enough to save homeowners who owe more on their mortgages than their homes are worth. Nearly 12 million of the 52 million Americans with a mortgage - that's 23 percent of them - are in that position, according to Moody's Economy.com.

It remains to be seen how much the government's intervention will stem the housing crisis. Earlier this month, the Federal Housing Administration launched a program that aims to prevent foreclosures by allowing homeowners to swap their mortgages for more affordable loans, but only if their lender agrees to take a loss on the initial loan. The bill is projected to help about 400,000 households.

Meanwhile, the Federal Deposit Insurance Corp., which took over Pasadena, Calif.-based IndyMac Bank over the summer, has been aggressively modifying troubled home loans since August in an effort to stave off foreclosures. Congressional Democrats are calling for that approach to be expanded as the Treasury Department buys billions in troubled mortgage debt as part of a $700 billion financial industry bailout.

[stevador39]

There has been a lot of fraud in mortages especially those issued by Countrywide. As well, usuary shows up in some mortages. Fraud aand usuary sums up the eight (8) years of the George Herbert Hoover Bush appointment to the White House.

[easeup-2009]

25% in California? I guess you reap what you sow.

[rphrost]

Please don''t spread McCain''s wealth, it is hard on his health.

[rphrost]

Please don''t spread McCain''s wealth, it is hard on his health.

[hypnotoad72]

Look at the states that have the highest foreclosure rates. They are states that blue states with homeowners given false dreams by their leaders.

Posted by danielle_mom
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"American Dream Downpayment Act of 2003" - signed by President Bush, and this was before 2006 when Dems managed to get just enough people in to tilt the balance of power.

President Bush signed it in good faith, but please don''t make things partisan (which is admittedly easy a thing to do...)

[danielle_mom]

Look at the states that have the highest foreclosure rates. They are states that blue states with homeowners given false dreams by their leaders.

[random_radar]

Government spending in the United States currently equals more than forty percent of national income, i.e., the sum of all wages and salaries and profits and interest earned in the country. This is without counting any of the massive off-budget spending such as that on account of the government enterprises Fannie Mae and Freddie Mac. Nor does it count any of the recent spending on assorted "bailouts." What this means is that substantially more than forty dollars of every one hundred dollars of output are appropriated by the government against the will of the individual citizens who produce that output. The money and the goods involved are turned over to the government only because the individual citizens wish to stay out of jail. Their freedom to dispose of their own incomes and output is thus violated on a colossal scale.

[lindh4]

The most curious thing about the disaster in the housing market is the fact that there are still no bargains in housing. One would think that housing prices would have been significant;y reduced but this is not the case. A house in Denver, Dallas or Chicago with an actual value of $150,000 is still offered for $750k. Perhaps when unemployment reaches 25 or 30%, housing values will reflect the economy.

[antoniof123]

Thank you George Bush, thank you Republicans so this was your October suprise for us.

God November will not come fast enough for us and then Januray 2009.

Obama/Biden for a change and a breath of needed air.

[mochooro]

Let the Loan Modification be implemented to avoid foreclousure or short sale. Encourage the lenders to act fast on loan modification in order that there will be no foreclosure or short sale. The problem with lenders they gave problem to borrowers and refused to modify the borrower''s loan. The government must implement policy and also credit rating and foreclosure must be suspended for a year. The government must also implement and encourage the lenders that they should accept partial payment and the foreclousure must initiate after 7th missed payment. Loan modification is a good solution but some lenders refused to cooperate and they gave tough problem for loan modification with the borrowers, sometimes they demand large upfront cash whereas at the beginning the borrower could no pay. Worst lenders such Hsbc, they give 6 months modification only- the economy is not improving that short time and maybe 2 years is the best.