US foreclosure filings surpass 300,000 for 8th straight month

SAN FRANCISCO: US foreclosure filings surpassed 300,000 for an eighth straight month as unemployment made it tougher for homeowners to pay their bills, RealtyTrac Inc said.

A total of 332,292 properties received a default or auction notice or were seized by banks in October, up 19% from a year earlier, Irvine, California-based RealtyTrac said on Niv 12. One in every 385 households received a filing. The tally fell 3% from September, the third consecutive monthly decline.

“The foreclosure problem is still with us and will keep prices down,” Stephen Miller, chairman of the economics department at the University of Nevada at Las Vegas, said in an interview. “The real issue is we don’t know what inventory banks are holding that they have yet to put on the market.”

Distressed real estate transactions accounted for 30% of all home sales in the third quarter as the median price fell 11% from a year earlier to US$177,900 (RM601,568), according to the National Association of Realtors. US unemployment surged to a 26-year high of 10.2% in October as payrolls fell by 190,000 workers, the Labor Department said last week.

Housing will reach a bottom by March 2010, with lower- priced properties recovering value more quickly than expensive homes, First American CoreLogic said last month.

“The fundamental forces driving foreclosure activity in this housing downturn -- high-risk mortgages, negative equity, and unemployment -- continue to loom over any nascent recovery,” James Saccacio, chief executive officer of RealtyTrac, said in the statement. “We continue to see foreclosure activity levels that are substantially higher than a year ago in most states.”

RealtyTrac sells default data collected from more than 2,200 counties representing 90% of the US population.

About seven million properties likely to be seized by lenders haven’t yet hit the market, Amherst Securities Group Managing Director Laurie Goodman wrote in a Sept 23 report.

Housing indicators that show price increases in some areas of the US are being distorted by government efforts to reduce foreclosures, which are temporarily limiting sales of seized homes, said Scott Simon, managing director at Pacific Investment Management Co. in Newport Beach, California.

“Part of that is the back end of the foreclosure moratoriums and people trying to work through modifications” of their home loans, Simon said in an interview. “At some point, these have to come through the pipeline.”

Nevada had the highest foreclosure rate for the 34th consecutive month, with one in 80 households receiving a filing. The number of filings fell 4% from the previous year, the first year-over-year decrease since January 2006. The total declined 26% from September.

California ranked second, with filings for one in every 156 households. Florida was third, at one in 168, RealtyTrac said.

Arizona, Idaho, Illinois, Michigan, Georgia, Maryland and Utah rounded out the top 10 highest foreclosure rates.

California led in total filings, with 85,420, up 50% from a year earlier. Default notices in the most populous state more than doubled and auction notices rose 73%, according to RealtyTrac.

Florida ranked second with 51,911 filings, down 4% from October 2008, the first year-over-year decrease since July 2006. Filings fell 6% from the previous month.

Illinois was third at 19,946, up 57% year-on-year and 56% from September, making it the only state with a foreclosure rate in the top 10 to have a monthly gain in filings. The total for Illinois was the highest in RealtyTrac records dating to January 2005.

Michigan ranked fourth with 16,468, up about 45% from a year earlier, RealtyTrac said.

Nevada, Arizona, Georgia, Texas, Ohio and New Jersey completed the 10 states with the most filings.

Filings fell 12% from a year earlier in New Jersey, which had the 13th highest rate. They dropped 26% to 2,306 in Connecticut, and rose 28% to 4,797 in New York.

Las Vegas had the highest foreclosure rate among metropolitan areas with populations of 200,000 or more. One in every 68 households got a notice, more than five times the national average. Even so, filings decreased 27% from September.

California had seven cities among the top 10. Vallejo-Fairfield ranked second and Modesto was third, both with a rate of one in 81 households. Riverside-San Bernardino was fourth and Bakersfield, Merced and Stockton ranked sixth through eighth, respectively. Sacramento came in 10th.

Cape Coral-Fort Myers and Orlando-Kissimmee, both in Florida, ranked fifth and ninth, respectively. – Bloomberg LP