BL: U.S. Home Foreclosures Almost Doubled in July, RealtyTrac Says
By Sharon L. Crenson
Aug. 21 (Bloomberg) -- U.S. homes in the foreclosure process almost doubled in July from a year earlier as variable-rate mortgages reset higher, leaving more homeowners unable to make their payments, according to RealtyTrac Inc., a seller of foreclosure data.
Lenders sent 179,599 notices of default, scheduled auctions or bank repossessions last month, a 93 percent increase, with the highest rates per household in Nevada, Georgia and Michigan. California, Florida and Michigan had the most homes caught in the foreclosure process, Irvine, California-based RealtyTrac said today in a statement.
U.S. home sales dropped to a four-year low in the second quarter and prices fell in a third of U.S. cities, according to the National Association of Realtors. Foreclosure rates are one indication of how many more homes may flood the falling market as banks sell those they take over. In June, a nearly nine-month supply of houses were on the market, up from a four-and-a half- month supply two years ago.
``We are estimating that we will see about 2 million foreclosure filings this year,'' said Rick Sharga, RealtyTrac's executive vice president for marketing. ``We honestly don't see it getting much better before it gets a little bit worse.''
California foreclosure filings totaled 39,013 in July, about triple the previous year. The state led the nation in foreclosure for the seventh consecutive month.
Florida ranked second with a 78 percent increase to 19,179 foreclosure filings. Michigan replaced Ohio as the state with the third highest number foreclosures: 13,979.
Worst State
On a per-household basis, Nevada ranked the worst with one foreclosure filing for every 199 homes, about three times the national average. Georgia's rate jumped from eighth to second highest in the country with one foreclosure filing for every 299 households.
In all, 43 states reported more foreclosure filings than a year ago.
Defaults on subprime mortgages, those to buyers with poor or limited credit histories, will continue driving up foreclosures through 2008, Sharga said, citing pending interest changes on adjustable-rate loans homeowners took out in 2005 and 2006.
``If they default like the subprimes have been defaulting this year, we won't be out of the woods for another nine to 12 months,'' he said.
To contact the reporter on this story: Sharon L. Crenson in New York at screnson@bloomberg.net .
Last Updated: August 21, 2007 06:13 EDT
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