Foreclosures Up 25 Percent From A Year Ago
The number of homeowners caught in the wave of foreclosures in October grew 25 percent nationally over the same month in 2007, data released Thursday showed.
More than 279,500 U.S. homes received at least one foreclosure-related notice in October, an increase of 5 percent over September, according to RealtyTrac Inc. One in 452 housing units received a foreclosure filing, such as a default notice, auction sale notice or bank repossession.
More than 84,000 properties were repossessed in October, RealtyTrac said.
In Ohio, one out of every 417 homes received a foreclosure filing last month. The state's foreclosure activity rose nearly 6 percent from September but was down 30 percent compared to October 2007, the report said.
A nasty brew of strict lending standards, falling home values and a tough economy is filtering through the housing market. By the end of the year, the company 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.
The collateral damage in the financial markets forced the government to pass a $700 billion financial rescue package last month. The plan was initially to buy bad assets from banks, but Treasury Secretary Henry Paulson said Wednesday that the rescue package won't purchase those troubled assets.
That plan would have taken too much time, he said, so instead the Treasury will rely on buying stakes in banks and encouraging them to resume more normal lending.
"The problem now is: How do you stem the tide of foreclosures if you're not doing anything to address it?" Fox Business News anchor Alexis Glick told CBS' The Early Show. "If you're not purchasing troubled assets ... what leeway do you have to say to the banks and financial institutions, 'You have to do something about lending.' They, right now, have no real guidance or oversight to say it's a must."
Some of the largest U.S. banks sharing in the $700 billion government bailout of the financial industry tried to assure skeptical lawmakers Thursday they are using the money to make more loans and help financially strapped homeowners avoid foreclosure.
Experts say efforts to curb foreclosures are too slow, to sporadic and reach too few homeowners, reports CBS News correspondent Ben Tracy.
"It's like having a boat full of water that is leaking all the time and each one of these programs is like giving someone a cup to bail it out," Guy Cecala, of Inside Mortgage Finance, told CBS News. "We need to be using buckets."
On Wednesday, Housing and Urban Development Secretary Steve Preston said the government may let more borrowers qualify for a $300 billion program designed to let troubled homeowners swap risky loans for more affordable ones. The program was launched Oct. 1, but there are concerns that lenders won't participate because they have to voluntarily reduce the value of a loan and take a loss.
In RealtyTrac's report, three states - Nevada, Arizona, Florida - had the nation's top foreclosure rates. Nevada posted the nation's highest rate for the 22nd consecutive month in October.
In Nevada, one in every 74 homes received a foreclosure filing last month. Arizona saw one in every 149 housing units receive a foreclosure filing, and in Florida it was one in every 157 homes.
Other states in the top 10 were California, Colorado, Georgia, Michigan, New Jersey, Illinois and Ohio.
However, RealtyTrac noted that, while California had the highest total number of foreclosures in October, the rate in that state was down 18 percent from the previous month.
James J. Saccacio, chief executive officer of RealtyTrac, said new laws requiring delays in the foreclosure process have reduced the volume of foreclosure filings in several states. In California, 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.
"While the intention behind this legislation - to prevent more foreclosures - is admirable, without a more integrated approach that includes significant loan modifications, the net effect may be merely delaying inevitable foreclosures," Saccacio said. "And in the meantime, the apparent slowing of foreclosure activity understates the severity of the foreclosure problem in these states."
Among cities, Las Vegas had the highest October foreclosure rate among the 230 metro areas tracked in the report, with one in every 62 housing units receiving a foreclosure filing.
Four Florida metro areas ranked in top 10 - Cape Coral-Fort Myers was second, Miami third, Fort Lauderdale eighth and Orlando 10th. California also had four metro areas in the top 10: Stockton fourth, Merced fifth, Riverside-San Bernardino seventh and Modesto ninth.
The remaining member of the top 10 was Phoenix, which came in sixth.