Foreclosure Filings Continue to Rise
Saturday, June 14, 2008
Soaring foreclosures continue to raise questions about the mortgage industry's claims that lenders are making a dent in the housing crisis.
Foreclosure filings last month were up nearly 50 percent compared with a year earlier, according to one company's count released yesterday. Nationwide, 261,255 homeowners received at least one foreclosure-related filing in May, up 48 percent from the same month last year, and up 7 percent from April, foreclosure listing service RealtyTrac said.
Those numbers come as criticism mounts that efforts by government and lenders to stem the tide of foreclosures aren't keeping up with the rising number of troubled homeowners. Critics say a Bush administration-backed mortgage industry coalition, called Hope Now, is falling short.
"It's clear that these voluntary efforts in and of themselves cannot really make a dent," said Allen Fishbein, director of credit and housing policy at the Consumer Federation of America. "Government intervention is going to be necessary."
The RealtyTrac report is the latest in a progression of grim foreclosure statistics. For instance, last week the Mortgage Bankers Association reported that about 2.47 percent of home mortgages were in foreclosure during the first quarter of the year, almost double the 1.28 percent rate of a year earlier, and the highest point since the group began compiling such figures in 1979. A Credit Suisse report this spring predicted that 6.5 million loans will fall into foreclosure over the next five years, reaching more than 8 percent of all U.S. homes.
Such statistics are leading to more calls for government intervention, especially from lawmakers pushing a plan for the government to guarantee as much as $300 billion in new loans to help borrowers refinance into cheaper, fixed-rate mortgages.
According to the RealtyTrac report, one in every 483 U.S. households received a foreclosure filing in May, the highest number since RealtyTrac started the report in 2005 and the second straight monthly record.
Foreclosure filings increased from a year earlier in all but 10 states. Nevada, California, Arizona, Florida and Michigan had the highest statewide foreclosure rates.
Metropolitan areas in California and Florida accounted for nine of the top 10 areas with the highest rate of foreclosure. That list was led by Stockton, Calif., and the Cape Coral-Fort Myers area in Florida.
Irvine, Calif.-based RealtyTrac monitors default notices, auction sale notices and bank repossessions. Company spokesman Rick Sharga said foreclosures are unlikely to peak until this fall. "I don't think we've seen the high point," he said.