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RealtyTrac Sees 33% Rise in Foreclosures
By Ted Cornwell
The latest data from RealtyTrac might be viewed as a glass-half-empty or glass-half-full indicator of home loan performance.
In February, foreclosure filings in the U.S. totaled 130,786. That was down 4% from the revised January total, but it was up 12% from February of 2006. Moreover, RealtyTrac said that if the trend from the first two months of this year holds up, foreclosure filings in 2007 may be 33% higher than in 2006 for the full year.
"It appears that as subprime and FHA loans default at higher-than-anticipated rates and lenders tighten their underwriting standards, we're going to continue to see a spike in the number of homeowners facing foreclosure," said James Saccacio, CEO of RealtyTrac.
RealtyTrac's figures include default notices, auction sale notices and bank repossessions. Naturally, not all cases in which a foreclosure filing occurs actually end up going through foreclosure, since some loans will cure before foreclosure action is completed.
RealtyTrac said the states with the highest level of foreclosure filings in February were Nevada, Colorado and Florida. It was the second month in a row that Nevada topped the list. Nevada had a foreclosure rate of one filing for every 278 households, more than three times the national average. Colorado had one filing for every 345 households and Florida had one for every 382 households.
RealtyTrac is hardly the only source seeing an increase in foreclosure activity. The MBA's most recent data, for the fourth quarter of 2006, also registered an increase in foreclosure activity.
The MBA found that the rate of home loans entering foreclosure rose to 0.54% in the fourth quarter of last year, a record in the 35-year history of the MBA National Delinquency Survey. And the problem was even worse among subprime loans, where the new foreclosure start rate rose to 2%. Because the MBA's subprime data only goes back a couple of years, historical comparisons are more difficult with the subprime sector.
That helped drive up the inventory of loans at some stage in the foreclosure process as well, with 1.19% of home loans outstanding in foreclosure. Among subprime loans, the foreclosure inventory rose to 4.53%.
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