Foreclosures: Moving on up
Filings rise with more on the horizon as interest rates jump on a record number of adjustable mortgages.
NEW YORK (CNNMoney.com) -- Foreclosure filings climbed during the third quarter of 2007 with no relief in sight, according to a report released Thursday.
The report by RealtyTrac, an online marketer of foreclosure properties, showed the number of filings rose 30 percent from the previous quarter and nearly doubled from a year earlier.
"Given the number of loans due to reset through the middle of 2008, and the continuing weakness in home sales, we would expect foreclosure activity to remain high and even increase over the next year in many markets," James J. Saccacio, chief executive of RealtyTrac said in a statement.
More than 635,000 foreclosure filings were reported nationwide - one for every 196 households. The filings include everything from default notices to auction sale notices to actual bank repossessions.
"August and September were the two highest monthly foreclosure filing totals we've seen since we began issuing our report in January 2005," said Saccacio.
States in the Sun Belt and the Rust Belt continued to dominate foreclosure filings.
In the third quarter, Nevada had the highest foreclosure rate - one for every 61 households. Filings in the state rose 23 percent from the last quarter and more than tripled from the year before.
California recorded the second-highest foreclosure rate with one filing for every 88 households. Numerically, the state had the most filings with 94,772 properties, which was up 36 percent from the second quarter. That was nearly four times higher than a year ago.
Florida had the next highest total among the states, one for every 95 households. Foreclosure filings jumped to a total of 86,465, up more than 50 percent from the previous quarter and nearly doubling from last year.
Rust Belt states located in the nation's former industrial centers that made the top 10 included Michigan (one in 102), Ohio (one in 107), and Indiana (one in 196).
"Although not all areas are being hit as hard as others, the rise in foreclosures is quite widespread, with 45 out of the 50 states documenting year-over-year increases in the third quarter," Saccacio said.
Foreclosures are expected to continue to increase as many of the adjustable-rate mortgages written during 2004 and 2005 reset, causing interest rates and mortgage payments to rise.
Resets could turn affordable loans into totally unaffordable ones for some borrowers, forcing them to go into default. In October, about $50 billion in ARMs reset, driving interest rates up for many borderline borrowers.