Foreclosure activity increased 9 percent nationally in January

Foreclosure activity increased 9 percent nationally in January
Based on RealtyTrac U.S. foreclosure-market report

Staff Report
Foreclosure activity up 57 percent from Jan, 2007Bank repossessions (REOs) up 90 percent year over year

IRVINE, Calif. – Feb. 26. RealtyTrac® (www.realtytrac.com), a leading online marketplace for foreclosure properties, today released its January 2008 U.S. Foreclosure Market Report™, which shows foreclosure filings — default notices, auction sales notices and bank repossessions — were reported on 233,001 properties during the month, an increase of 8 percent from the previous month and an increase of nearly 57 percent from January 2007.

“January’s foreclosure numbers demonstrate that foreclosure activity is continuing on its upward trend, substantially increasing from a year ago in many states,” said James J. Saccacio, chief executive officer of RealtyTrac. “However, the 8 percent monthly increase in January is not as precipitous as the 19 percent spike we saw in January of 2007, and several key states actually experienced decreasing foreclosure activity from the previous month. It could be that some of the efforts on the part of lenders and the government — both at the state and federal level — are beginning to take effect. The big question is whether those efforts are truly helping homeowners avoid foreclosure in the long term or if they are just temporarily forestalling the inevitable for many beleaguered borrowers.”

Nevada, California, Florida post top state foreclosure rates
Despite a month-over-month drop in foreclosure activity, Nevada continued to document the highest foreclosure rate among the 50 states. Foreclosure filings were reported on a total of 6,087 Nevada properties during the month, a 45 percent decrease from the previous month but still a 95 percent increase from January 2007.California’s January foreclosure rate ranked second highest among the states, and Florida’s January foreclosure rate ranked third highest. Other states with foreclosure rates ranking among the top 10 were Arizona, Colorado, Massachusetts, Georgia, Connecticut, Ohio and Michigan.

California, Florida, Texas report highest foreclosure totals
Foreclosure filings were reported on a total of 57,158 properties in California in January, the most of any state. The state’s foreclosure activity was up 7 percent from the previous month and up 120 percent from January 2007.Despite a 3 percent month-over-month decrease in foreclosure activity, Florida’s total of 30,178 properties with at least one foreclosure filing was the nation’s second highest state total. The state’s foreclosure activity was up nearly 158 percent from January 2007.The nation’s third highest January total was in Texas, where foreclosure filings were reported on 14,698 properties — a nearly 20 percent increase from the previous month, but a slight decrease from January 2007. The state’s monthly foreclosure rate was below the national average and ranked No. 13 among the states.Ohio, Michigan and Georgia all documented totals of more than 10,000 properties with foreclosure filings reported in January.

Other states in the top 10 in terms of total properties with foreclosure filings reported were Arizona, Massachusetts, Illinois and Colorado.

California and Florida cities dominate top metro foreclosure rates
California and Florida metro areas accounted for eight of the top 10 metro foreclosure rates in January. The Cape Coral-Fort Myers, Fla., metro area documented the highest January foreclosure rate among the 229 metro areas tracked in the report. The other Florida metro area in the top 10 was Port St. Lucie-Fort Pierce, which ranked No. 10. The Stockton, Calif., metro area documented the second highest metro foreclosure rate. Other California metro areas in the top 10 were Riverside-San Bernardino at No. 3, Modesto at No. 4, Merced at No. 5, Vallejo-Fairfield at No. 7 and Bakersfield at No. 9.Other cities in the top 10 were Las Vegas at No. 6 and Greeley, Colo., at No. 8.

Report Methodology
The RealtyTrac Monthly U.S. Foreclosure Market Report provides a count of the total number of properties with at least one foreclosure filing reported during the month — broken out by type of filing at the state and national level. Data is also available at the individual county level. RealtyTrac’s report incorporates documents filed in all three phases of foreclosure: Default — Notice of Default (NOD) and Lis Pendens (LIS); Auction — Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS); and Real Estate Owned, or REO properties (that have been foreclosed on and repurchased by a bank). If more than one foreclosure document is filed against a property during the month — which is extremely rare — only the most recent filing is counted in the report.

America's Rapidly Rising Foreclosure Areas

America's Rapidly Rising Foreclosure Areas
Matt Woolsey (Forbes.com)

Though delinquencies continue to mount in Detroit, Stockton, Calif., and Las Vegas, markets where the number of foreclosures are relatively low, but rapidly rising, are also causing concern.
Take the Washington, D.C., metro, the Baltimore metro and many spots that fall between the two. While the sheer number of foreclosure filings in Bethesda, Md., (a metro that includes Frederick and Gaithersburg) are about a quarter of those in Detroit, they're up a whopping 1,288% in 2007, according to a RealtyTrac's year-end report, released today. In addition, they're up 574.9% in Washington, D.C., which includes the Maryland and Virginia suburbs, and up 544% in the Baltimore metro.

While Project Lifeline, the Bush administration's plan to give delinquent borrowers 30 days to renegotiate the terms of their loans, should help, U.S. Treasury Secretary Paulson, in announcing the initiative yesterday, said that "the worst is just beginning," as "the loans resetting over the next couple years--that vintage was done under the most lax underwriting standards."

Behind The Numbers RealtyTrac's report measures foreclosure activity, or homes in three phases of foreclosure: properties in default, those with a notice of trustee or foreclosure sale, and homes known as REOs (real estate owned), which have been foreclosed and repurchased by the bank.

These distinctions are especially important following Paulson's announcement Tuesday that the government's Project Lifeline would temporarily halt foreclosures and provide refinancing and rewriting assistance for homeowners in conjunction with JPMorgan Chase (nyse: JPM - news - people ), Wells Fargo (nyse: WFC - news - people ), Countrywide Financial (nyse: CFC - news - people ), Washington Mutual (nyse: WM - news - people ), Bank of America (nyse: BAC - news - people ) and Citigroup (nyse: C - news - people ), who together hold about 50% of outstanding mortgages.

For example, a homeowner faced with a notice of default--or the subsequent "lis pendens," or suit pending--can still avoid losing his home by restructuring payments or simply catching up on overdue ones. For those with no equity as the result of a zero-down payment or piggy-back loans, it's going to be harder, since they have nothing invested in the home and may find it difficult to work with lenders.

It's important to note that these figures are the percentage change in foreclosures. In absolute terms, foreclosures in Baltimore only represent only 0.7% of the total households, while those in Detroit represent 4.9%.

What's more, foreclosures are not an invention of the last three years. Any jump in foreclosure rates is troubling, though in any healthy market there will be delinquencies.
"I always thought that an acceptable range was 1% to 3%," says Jonathan Miller, research director at Radar Logic, a New York-based real estate firm. Meaning that only a handful of markets on this list are significantly outside of what he calls the normal foreclosure range. "It's definitely a real issue in certain markets, but I think that it's being overhyped overall.

In Depth: America's Rapidly Rising Foreclosure Spots

In places that are beginning to see meteoric rises in foreclosure rates, such as the Washington, D.C., metro, a large share stem from the overbuilt ex-urbs, or commuter towns, where price drops have put people's mortgages into the red. When prices spike and then fall, the first areas affected are the "drive to qualify" exurbs.

"There's been a ton of development, and a lot of people just flat out overpaid in the ex-urbs," says Cullen Watson, a real estate broker and settlement attorney in Washington, D.C. "Those properties have become less valuable, and a lot of people found themselves upside down thanks to 95% or 100% financing."

Compounding the problem, says Watson, are banks asking market rates, or the full amount owed on a mortgage note, at foreclosure auctions, hardly a recipe for a quick sale.
"It's hard to say which bank ... it's all of them," he says. "It's gotten to the point now where I've stopped taking clients to auctions."

Among those cities in deep foreclosure trouble are Stockton, where the 2007 year-end foreclosure rate was up 271.3% over the year before. In Bakersfield, Calif., foreclosures jumped 244.8%. As a matter of perspective, foreclosures in Detroit grew by 68% last year.

Rate Rank Metro Area Foreclosure Filings Properties with Filings %Households % Change from 2006

1 BETHESDA/FREDERICK/GAITHERSBURG, MD
2 ALBANY/SCHENECTADY/TROY, NY
3 WASHINGTON/ARLINGTON/ALEXANDRIA, DC-VA-MD
4 BALTIMORE/TOWSON, MD
5 PROVIDENCE/NEW BEDFORD, RI
6 NEWHAVEN/MILFORD, CT
7 SACRAMENTO, CA
8 STOCKTON, CA
9 NORFOLK/VIRGINIA BEACH/NEWPORT NEWS, VA
10 BRIDGEPORT/STAMFORD/NORWALK, CT
11 BAKERSFIELD, CA
12 SARASOTA/BRADENTON/VENICE, FL
13 HARTFORD, CT
14 NEW ORLEANS, LA
15 CAMBRIDGE/NEWTON/FRAMINGHAM, MA
16 BOSTON/QUINCY, MA
17 VENTURA, CA
18 OAKLAND, CA
19 ESSEX, MA
20 RIVERSIDE/SAN BERNARDINO, CA

Plan targets blight from foreclosures

Plan targets blight from foreclosures
BY JAMES GELUSO (Bakersfield Californian, Feb. 19th)

Bakersfield code enforcers would work with local real estate agents to track foreclosed homes -- in an effort to limit blight -- under a plan approved Tuesday by a City Council committee.
Under the plan, the Bakersfield Association of Realtors would share its data on what homes are in foreclosure. That would help the city watch the properties and track down owners faster, said Phil Burns, city building director.

The plan will likely go to the full council for ratification in March.
Currently, the city uses Kern County's ownership listings, but when someone is foreclosed on, the listings can lag a few months, Burns said. Cleanup notices often go to owners who have been evicted instead of the lenders who have taken ownership.

And when the city tries to get a lender to clean up, it's difficult to penetrate the company's bureaucracy. The local association would help the city identify the local agent handling the property, who would be able to get the authorization to clean up the property faster than the city can through its legal process, Burns said.

The city discarded an earlier idea to create a registry of foreclosed properties. Burns said he and agents decided not to add more registration requirements to the foreclosure process.