Nation's foreclosure rate in October increases 25 percent year-over-year, with Nevada on top
By ADRIAN SAINZ - AP - Update: Nov. 13, 2008 - 7:12 AM
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 every 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.
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.
Also 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 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."
In discussing severity, and states and cities facing the worse situations, Minnesota and its cities were not mentioned. I recall months ago reporting was that Wright County at that time was suffering more than other state areas. Whether that market has rebounded some or not has not been reported in anything I have read.
In Ramsey, Anoka County, where I live, there have been a few new shared-wall units built at Town Center, and it appears the Bauer Gun Club site has new building and the Peterson cornfield project by Trott Brook and Highway 5 is being built out. Peterson's smaller Alpine Woods, where he brought the big north-Ramsey sanitary sewer pipe across Sunfish Blvd., appears fully built out, or nearly so. The market is slow but not fully moribund.
At Town Center, I do not know if the new Hovnanian and DR Horton activity is aimed at keeping crew off UI where rates would increase more if labor cutbacks were greater, and aimed at putting inventory out of warehouses and on the ground where storage costs less and the chance of buyer activity exists.
It would make sense to take such steps if the costs can be carried, even in a down market.