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Foreclosures Rip Into Home Ownership

Written by on Monday, 16 June 2008 7:00 pm

Foreclosures just won't go away.

RealtyTrac said late last week, foreclosure filings in May were up 48 percent from a year ago.

One in every 483 mortgage households received a foreclosure filing during the not so merry month of May

RealtyTrac's foreclosure filings include default notices, auction sale notices and bank repossessions. In May, they were at the highest level they've been since RealtyTrac began tracking them in January 2005.

May was the 29th straight month of year-over-year growth in foreclosure activity.

A week earlier, the Mortgage Bankers Association said the more than 1 million home owners who faced losing their home in the first quarter this year was the greatest number since the association began compiling figures nearly 30 years ago.

In the association's report, about 2.5 percent of home mortgages were in foreclosure during the first quarter. That was up from nearly 1.30 percent a year ago.

Another 6.4 percent of home mortgages were delinquent, but not yet in foreclosure. Last year it was only about 4.8 percent, the association reported.

RealtyTrac said Nevada, California, and Arizona had the highest state-level foreclosure rates, followed my Michigan and Ohio. Also in the Top 10 were Georgia, Texas, Illinois, Nevada and New Jersey.

The bankers association said the problem isn't just adjustable rate mortgages (ARMs) resetting to high rates. More than 60 percent of the loans entering foreclosure are adjustable-rate mortgages, but many of the loans went bad before the rates reset.

Homeowners with tarnished credit who have subprime loans with adjustable rates were hardest hit.

The growing abundance of foreclosures is pushing down home prices, but tight credit, generated by so many failing loans, continues to make it tough for many to get approved for a home mortgage.

Interest rates have also been edging up.

It's a vicious circle.

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  About the author, Broderick Perkins

Individual news stories are based upon the opinions of the writer and does not reflect the opinion of Realty Times.
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