If the Fed, Capitol Hill, and the White House hadn't notice yet, they should now. Foreclosures (default notices, auction sale notices, and bank repossessions) in the U.S. for the third quarter are up 34 percent from the second quarter and a staggering 100 percent from the same period in 2006, according to a report by Irvine, Calif.-based RealtyTrac, an online marketplace for foreclosure properties. A total of 635,159 foreclosure filings (on 446,726 properties) were reported nationwide from July to September.
The report also reveals that August and September were the two highest monthly foreclosure filing totals RealtyTrac has seen since it began issuing the report in January 2005. James J. Saccacio, CEO of RealtyTrac, says 2008's outlook doesn't appear to be much better.
"Although not all areas are being hit as hard as others, the rise in foreclosures is quite widespread, with 45 out of the 50 states documenting year-over-year increases in the third quarter," Saccacio says. "Given the number of loans due to reset through the middle of 2008 and the continuing weakness in home sales, we would expect foreclosure activity to remain high and even increase over the next year in many markets."
For the period (and through most of the year), Nevada, California, and Florida posted the nation's highest foreclosure rates. Nevada's rate is one foreclosure filing for every 61 households and a total of 16,817 foreclosures is a 23 percent increase from the second quarter and more than triple the number reported in the third quarter of 2006.
California's third-quarter foreclosure rate of one foreclosure filing for every 88 households and a total of 148,147 foreclosures is a 36 percent jump quarter-to-quarter and nearly quadruple the number reported in the third quarter of 2006.
Florida documented a third-quarter foreclosure rate of one foreclosure filing for every 95 households with a total of 86,465 foreclosure filings, which is a 50 percent increase from the previous quarter and more than double the number reported in the third quarter of 2006.
California and Florida also registered at the top of foreclosure filings totals for the quarter, followed by Ohio, Texas, Michigan, Georgia, Arizona, Illinois, Colorado, and Nevada. On the other end of the spectrum, Vermont, with a total of just 25 filings, holds the nation's lowest foreclosure activity rate.
The nation's growing foreclosure crisis, which was sparked by predatory lending practices, has forced the nation's top lenders (Bank of America Corp., Citigroup, Countrywide Financial Corp., JPMorgan Chase, Washington Mutual, and Wells Fargo) to form the HOPE NOW Coalition. Under the guidance of the Treasury Department, the group will attempt to help the estimated 2 million homeowners whose adjustable rate mortgages with low rates are resetting at much higher rates.
Wednesday's report comes less than 24 hours after the Federal funds target rate was cut for a second time by the Fed in 43 days.
Click here to download an Excel spreadsheet detailing the third quarter foreclosure activity across the nation.
Learn more about markets featured in this article: Los Angeles, CA.