RealtyTrac' an Irvine, California based firm that bills itself as the "leading
online marketplace" released its 2007 U.S. Foreclosure Market Report on Tuesday
which revealed that, during 2007, more than 2.2 million foreclosure
filings were logged against 1.3 million properties nationwide. Measured
activities include default notices, auction sale notices and actual bank repossessions
of real property. This is a 75 percent increase over the rate of filings in
2006, a figure that looks even starker when one realizes that 2006 was not a
particularly good year for homeowners either. The 2007 figure is 149
percent higher than totals for 2005.
Furthermore more than 1 percent of all U.S. households were in some stage of
foreclosure during the year, nearly double the rate .58 rate in 2006.
While the whole year was bad, the month of December was even
worse. A total of 215,749 foreclosure filings were reported in that month, up
97 percent from December 2006. This brought the fourth-quarter 2007 total up
to 642,150 filings on 527,740 properties. This was an increase of only 1 percent
over the third quarter but was 86 percent above the total for the fourth quarter
of 2006.
It is worth noting that RealtyTrac data does not include mortgage delinquencies.
Foreclosure activity is typically started when a mortgage is 90 days delinquent.
According to the most recent delinquency data released by the Mortgage Bankers
Association in December, 5.59 percent of all borrowers were delinquent on their
mortgage loans during the third quarter compared to 5.12 percent in the second
quarter and 4.67 percent one year ago. Many 30-or-60-day delinquencies are resolved
before the loans enter any type of legal process, but if those third-quarter
delinquencies are now aging into formal legal processes, foreclosure activities
may be up sharply by the next RealtyTrac report.
James J. Saccacio, chief executive office of RealtyTrac stated,
"The year ended with a monthly increase of 7 percent in December, making it
the fifth straight month with more than 200,000 foreclosure filings reported
and giving the fourth quarter the highest quarterly total we've seen since we
began issuing our report in January 2005. And while filings were up 75 percent,
the number of properties in some stage of foreclosure was up 79 percent, indicating
that some properties may have just entered the initial stage of foreclosure
in 2007 and could be going through the rest of the foreclosure process in 2008
- unless lender and government intervention efforts begin to gain more traction."
As has been noted elsewhere, especially during media coverage of the primary
caucuses, Nevada has been especially hard hit by foreclosures.
The state had the nation's highest rate for the year with 3.4 percent of its
households entering some stage of foreclosure, more than three times the U.S.
average. 66,316 filings were made on 34,417 properties during the year, twice
the number of filings in 2006.
Florida was the second ranked state with a total of 279,325
foreclosure filings on 165,291 properties and more than 2 percent of its households
entering some stage of foreclosure during the year. The filings were double
the number reported in 2006 but filings in December were up a staggering 275
percent from December 2006 and fourth-quarter filings were 211 percent above
those in the fourth quarter of last year.
Rounding out the top five states were Michigan, California,
and Colorado with Ohio, Georgia, Arizona, Illinois, and Indiana not far behind.
In each of these states more than 1 percent of households entered some stage
of foreclosure during the year.
While several of the hardest hit states, notably Nevada, California, and Florida,
were models of boom and bust economics, having gone through explosive growth
and spiraling prices over the last few years, others such as Michigan, Indiana,
and Ohio never got much benefit out of the housing bubble. Now they are not
being spared the aftermath.
It would be interesting to know whether the patterns of foreclosure in the
bubble states differ from patterns in non-bubble states. In other words, are
those in foreclosure in Nevada, Florida, and California victims of subprime
mortgages or overly exuberant investment activity while those in Michigan and
Ohio are suffering the fallout from a generally rotten local economy?