By Jennifer Yousfi
Foreclosure filings hit an all-time high with a 65% year-over-year increase in April and a 4% increase from March, RealtyTrac reported yesterday (Wednesday).
RealtyTrac Chief Executive James J. Saccacio said the 243,353 foreclosure filings last month was the highest since his firm began tracking the data in January 2005, The Wall Street Journal reported.
"Although only about 2% of households nationwide are in foreclosure, these properties contribute to already bloated inventories of homes for sale, and put downward pressure on home values," Saccacio noted.
Nationwide, one in every 519 households received a foreclosure notice.
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California, Florida, Nevada and Arizona were the hardest-hit states. California had the highest number of total filings with 64,683 properties falling into foreclosure while Nevada had the highest foreclosure rate, with one in every 146 households filing for foreclosure.
And while current foreclosure levels are at record highs, Saccacio expects the situation to get worse. The credit markets remain tight, making it difficult for overextended homeowners to obtain refinancing that might help them to avoid foreclosure.
"Loan modification isn't working," Ira Rheingold, executive director of the National Association of Consumer Advocates in Washington, told Bloomberg News. "It's extremely difficult for a homeowner to talk to a servicer and even if they do, it's hard to get the servicer to change the terms. You get voice-mail hell, they don't return calls, you can't get a live person on the phone."
At the same time that consumers are finding it hard to obtain needed financing, the high level of housing inventory, currently at an 11-month supply, is making it very difficult for distressed homeowners to sell.
Saccacio stated that he expects foreclosure filing levels to "remain high and even increase" through the end of the year, particularly "given the number of loans due to reset through the middle of 2008 and the continuing weakness in home sales."
In fact, banks will continue to seize about 60,000 properties a month through December, Bloomberg reported. At that rate, about 1 million U.S. homes, or 25% of all homes for sale, could be bank-owned, Rick Sharga, RealtyTrac's executive vice president of marketing, said in an interview.
News and Related Story Links:
The Wall Street Journal:
April Foreclosures Hit New High
Foreclosures Climb 65% as Loan Workouts Fall Short