The Guardian 7 November, 2007
Mortgage default warnings soar in US
A soaring number of US homeowners struggled to make mortgage payments in the third quarter, with properties in some stage of foreclosure more than doubling from the same time last year, a mortgage data company said last week. (A foreclosure filing may include notices of default, auction sale or bank repossession).
A total of 446,726 homes nationwide were targeted by some sort of foreclosure activity from July to September, up 100 percent from the same period two years ago, according to Irvine-based RealtyTrac Inc. This means there was one foreclosure filing for every 196 households in the nation
The number of homes with foreclosure filings in Massachusetts surged more than twelve-fold from last year, the largest year-over-year increase in the country.
All but five states — Kentucky, New Mexico, Oklahoma, South Dakota and Utah — reported a year-over-year increase. in foreclosure filings, , the company said.
A single property can sometimes receive more than one notice in a three-month period.
"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", he said.
Mortgage lenders are bracing for a flood of defaults as many adjustable-rate mortgages originated in 2005 and 2006 during the height of the housing market frenzy reset to higher interest rates.
The loans were initially attractive options for buyers because of their cheaper "teaser" interest rates that kept monthly payments low, but even a small percentage increase can translate into a far higher payment.
With home sales in decline and prices down or flat in many regions, more homeowners are landing in foreclosure because they can’t afford to sell their homes after falling behind on payments.
The three states with the highest foreclosure rates during the third quarter were Nevada, California and Florida.
Nevada reported one foreclosure filing for every 61 households. That marked a 22.8 percent increase in filings from the previous quarter and a tripling from the year-ago quarter.
California led the nation in total foreclosure filings and reported one filing for every 88 households — an increase in filings of 36 percent from the previous quarter and nearly four times more than the year-ago period.
In Florida, foreclosure filings rose 51.5 percent from the previous quarter and more than doubled from the same quarter last year.
Florida’s foreclosure rate amounted to one filing for every 95 households.
Rounding out the top 10 states in foreclosure rates were Michigan, Ohio, Colorado, Arizona, Georgia, Indiana and Texas.