U.S. foreclosure filings up 79% in 2007

U.S. foreclosure filings rose 79.2 percent in 2007 compared to 2006, with 1 percent of all households entering a stage of foreclosure, data company RealtyTrac reported today.

Among the 100 largest U.S. metro areas the foreclosure rate was highest in the Detroit area, with 4.9 percent of all homes in that metro entering a stage of foreclosure in 2007.

There were 72,616 total foreclosure filings and 41,273 properties with foreclosure filings in the Detroit metro area in 2007, up 68.2 percent compared to 2006, RealtyTrac reported.

The household numbers are based on the U.S. Census Bureau’s 2005 estimates of total housing units, and RealtyTrac tracks filings for all phases of foreclosure, including notice of default and lis pendens, notice of trustee sale and notice of foreclosure sale, and real estate-owned (REO) properties that have been foreclosed on and repurchased by a bank.

Four of the 10 metro areas with the highest foreclosure rates in 2007 are in California and two are in Florida. Among the 20 metro areas with the highest foreclosure rates, six are in California, four are in Ohio, and three are in Florida.

Several programs have been announced to combat the rising tide of foreclosures. This week, six major lenders finalized an agreement, dubbed Project Lifeline (see related Inman News article), to temporarily freeze pending foreclosures while seeking workout plans for some borrowers.

That group of lenders, which includes Bank of America, Citigroup, Countrywide Financial Corp., Chase, Washington Mutual and Wells Fargo, are also a part of HOPE NOW, an effort to expedite loan modifications for some subprime borrowers.

The Stockton, Calif., metro area, ranked second on the list for its foreclosure rate (see Inman News report on the foreclosure problem in Stockton). That community had 22,184 foreclosure filings and 10,608 properties with foreclosure filings in 2007 — foreclosure filings rose 271.3 percent in Stockton in 2007 compared to 2006, and the area had a foreclosure rate of 4.9 percent of homes in some stage of foreclosure in 2007.

The Las Vegas metro area ranked third on the list of metro areas with the highest rate of foreclosure, with 4.2 percent of households in the area entering a stage of foreclosure in 2007. Las Vegas had 59,983 total foreclosure filings and 30,375 properties with foreclosure filings in 2007, a rise of 169.1 percent.

Fourth on the list was the Riverside-San Bernardino, Calif., metro area, with 3.8 percent of households in a foreclosure stage in 2007, followed by Sacramento, Calif., with a rate of 3.2 percent.

The Bethesda, Md., metro area saw the sharpest year-over-year spike in foreclosures in 2007, RealtyTrac reported. That metro area had 4,179 total foreclosure filings and 2,999 properties with filings in 2007, up 1,288.4 percent. The Albany-Schenectady-Troy, N.Y., metro area experienced a 638.5 percent rise in foreclosure filings in 2007; the Washington, D.C., metro area was up 574.9 percent; and the Baltimore, Md., area was up 544.4 percent.

Meanwhile, 14 of the nation’s largest metro areas experienced a decline in foreclosure filings in 2007 compared to 2006. Foreclosure filings were down 73.5 percent in the Greenville, S.C., metro area; down 59.8 percent in the Baton Rouge, La., metro area; down 32.1 percent in the Philadelphia metro area; down 29.6 percent in the Pittsburgh, Pa., metro area; and down 19.7 percent in the McAllen-Edinburg-Pharr, Texas, metro area, RealtyTrac reported.

Riverside-San Bernardino led the list with the highest number of properties with foreclosure filings in 2007, at 51,739; Chicago had 50,350 properties with foreclosure filings last year; Atlanta had 50,271; Los Angeles had 45,415; and Detroit was fifth with 41,273.

James J. Saccacio, RealtyTrac CEO, said in a statement, “Most of the metro areas with the highest foreclosure rates were either cities like Stockton and Las Vegas, which experienced meteoric growth and unsustainable price appreciation over the past few years, or cities like Detroit, which are undergoing a more widespread economic downturn along with higher unemployment rates.”

A separate report on foreclosure activity in California, released this week by foreclosure data company ForeclosureRadar, reveals that the total number of properties sold at foreclosure auction in California rose 454 percent compared to January 2007, and was up 55 percent compared to December.

“With a minimum of roughly four months between recording of a notice of default and the property being sold at auction, the recent increases in defaults clearly indicate that auction sales are likely to also increase further in coming months,” ForeclosureRadar reported.

Of the 19,821 homes that went to foreclosure auction, 13,950 were discounted, with an average opening bid discount of 16 percent, and 4,624 had discounts of 30 percent or more, according to ForeclosureRadar, and “many of these properties are being offered at 50 to 70 percent of their prior value.” Despite the discounts, the company reported that 98 percent of auction sales in January went back to the lender after receiving no bids.

There were 38,617 notices of default recorded in January in California, up 16.4 percent compared to December 2007, the company reported.