U.S. Foreclosures Rise 65 Percent As Vacated Homes Add To Glut

U.S. Foreclosures Rise 65 Percent as Vacated Homes Add to Glut

http://www.bloomberg.com/apps/news?p...6WY&refer=home

By Dan Levy

May 14 (Bloomberg) -- U.S. foreclosure filings climbed 65 percent and bank seizures more than doubled in April from a year earlier as rates on adjustable mortgages increased and vacated homes added to a glut of unsold homes, RealtyTrac Inc. said.

More than 243,300 properties, or one in every 519 households, were in some stage of foreclosure, the highest monthly total since RealtyTrac, a seller of default data, began statistics in January 2005. Nevada, California and Florida had the highest rates. Filings rose 4 percent from March.

Properties in foreclosure "contribute to already bloated inventories of homes for sale, and put downward pressure on home values," RealtyTrac Chief Executive Officer James Saccacio said today in a statement.

The collapse of the U.S. housing market, the worst since the Great Depression, is contributing to the economic slowdown and may push the economy into a recession. Median prices for a single- family home fell 7.7 percent in the first quarter, the biggest drop in 29 years, the National Association of Realtors reported yesterday. There were 4.06 million U.S. homes for sale at the end of March, 40,000 more than the prior month, the Realtors association said in an April 22 report.

"Inventory levels have soared to unprecedented levels" Brian Fabbri, chief North American economist for BNP Paribas, said in an interview. "Builders and homeowners have to lower their prices significantly to sell that inventory out."

Bank Seizures
Bank repossessions jumped 145 percent in April from a year earlier to 54,574, according to Irvine, California-based RealtyTrac. The company has database of more than 1.5 million properties and monitors foreclosure filings including defaults notices, auction sale notices and bank seizures.

Banks will seize about 60,000 properties a month through December, when about 1 million U.S. homes, or a quarter of all homes for sale, may be bank-owned, Rick Sharga, RealtyTrac's executive vice president of marketing, said in an interview.

"These are the properties that are causing the bloat in the inventory," he said.

Delinquencies on subprime mortgages will continue to rise and defaults on prime loans also may accelerate as people lose their jobs in a slowing economy, Fabbri said. About $460 billion of adjustable-rate loans were scheduled to reset this year, according to New York-based analysts at Citigroup Inc.

Congressional Action
Foreclosures are mounting even as the Bush Administration and Congress propose relief for homeowners. The Democrat-led U.S. House of Representatives approved a $300 billion plan May 8 that would allow the government to insure refinanced mortgages. Acting Housing and Urban Development Secretary Roy Bernardi said the next day he was willing to compromise on the proposal after Republican President George W. Bush threatened to veto it.

Nevada had the highest U.S. foreclosure rate for the 16th consecutive month. One of every 146 households was in some stage of foreclosure, 3.6 times the national rate, RealtyTrac said. Filings almost doubled from a year earlier to 7,276.

California had the second-highest rate, one for every 204 households, and the most filings for the 16th consecutive month at 64,683. Filings more than doubled from a year earlier and were down less than 1 percent from March.

Arizona had the third-highest rate, one for every 224 households. Filings almost tripled from a year earlier to 11,620.

Florida had the second most filings at 35,264 and the fourth- highest rate, one for every 242 households. Foreclosures increased 146 percent from a year earlier and rose almost 17 percent from March.

Ohio ranked third in filings at 11,680. Arizona, Texas, Michigan, Georgia, Illinois, Nevada and Maryland also ranked in top 10 states with the most filings, RealtyTrac said.

Foreclosure filings in New York were up 39 percent from a year ago and up 12 percent from March. The state ranked 29th with 5,696 filings.

In New Jersey, foreclosure filings ranked 15th at 5,143, up 65 percent from a year ago and up 15 percent from March. Connecticut foreclosures ranked 19th at 1,707, down 59 percent from a year ago and down 20 percent from March.