Foreclosure Activity Seen Rising 33 Pct
Reuters
By Jim Christie
March 26, 2007

SAN FRANCISCO (Reuters) - Foreclosure activity across the United States will rise by 33 percent this year as lenders tighten standards amid a jump in defaults on subprime mortgages, according to a RealtyTrac Inc. report released on Monday.

"Based on our numbers for the first two months of 2007, foreclosure activity is running at a rate that would project to a 33 percent increase over 2006," RealtyTrac Chief Executive James Saccacio said, adding that "we're going to continue to see a spike in the number of homeowners facing foreclosure."

The Irvine, California, firm said February foreclosure activity, which includes default notices, auction sale notices and bank repossessions, rose 12 percent from a year earlier and that during the month there was one foreclosure filing for every 884 households.

Foreclosure filings totaled 130,786 last month, according to RealtyTrac, an Internet real estate data provider.

Turmoil in the subprime mortgage market, which provided home financing to the riskiest borrowers during the housing boom, is pushing many households into foreclosure.

Increasing numbers of those borrowers are in default or are heading toward foreclosure because their mortgage payments have become too expensive after interest rates on their loans reset above low initial levels.

Because of rising defaults, some lenders have discontinued making such loans and some have gone out of business.

 At least four large subprime lenders have sought bankruptcy protection since late December, and state and federal regulators are calling for greater oversight.

Nevada posted the highest state foreclosure rate for the second consecutive month in February on a 24 percent increase in foreclosure activity from January.

Nevada reported 3,124 foreclosure filings last month, marking an increase of 77 percent from a year earlier and a foreclosure rate of one foreclosure filing for every 278 households, or more than three times the national average.

Colorado, Florida, Georgia, Michigan, Tennessee, Ohio, Texas, Arizona and Indiana followed Nevada on the list of states with 10 highest foreclosure rates in February.

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