Foreclosures Skyrocket Once Again

[Oct 5, 2007.]

The housing market took a substantial hit in August, as the number of foreclosure filings doubled over the previous August's totals. The increase also represents a 36% rise from the July totals.

All told, some 243,947 foreclosure filings were logged in August, according to RealtyTrac Inc., a California-based company. Back in August of 2006, the rate was only 113,300. That means that the foreclosure rate increased a whopping 115% in a single year.

Foreclosure filings consist of bank repossessions, auction sale notices, and default notices. If a single property is held by more than one mortgage, more than one foreclosure notice might have been filed.
The August foreclosure rate is also significant in that it signals the largest number of filings in a single month since RealtyTrac began recording the rate two years ago.

The head of RealtyTrac was quoted as saying that the increase in foreclosure filings is the result of the significant number of adjustable rate loans that are being reset in the subprime market. The collapse of the subprime loan sector has been cited as the major reason for the current housing slump, which has become a nationwide phenomenon.

The housing market is also suffering from the effects of stalled home sales and declining home prices. In addition, many prospective buyers are finding it difficult to obtain loans because of troubled credit histories and tightening loan restrictions.

The highest foreclosure rates are in the states of Nevada, California, and Florida - hardly a surprise to those who've been following recent housing trends.

Meanwhile, bank repossessions skyrocketed to 42,789 in August. In July, the total number amounted to only 26,842.

Other states experiencing high foreclosure rates include Georgia, Ohio, Michigan, Arizona, Colorado, Texas, and Indiana. In some instances, job losses may be driving foreclosure rates upward.

Meanwhile, housing experts predict no relief in sight in the troubled mortgage market. House sales are not expected to pick up until sometime in the next year and a half.

Julie Ann Amos
October 5th 2007

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