Foreclosures Up 115% From Last Year

Foreclosures “zoomed” in August, up 115% from last year and 36% from July according to the newest numbers from RealtyTrac. This is the beginning of one of three remaining waves that will hit the market in the next year. This wave is expected to peak in October as 2 million 2/28 ARMs reset to market rates and an estimated 600,000 homeowners can no longer afford their payments.

“The jump in foreclosure filings [in August] might be the beginning of the next wave of increased foreclosure activity, as a large number of subprime adjustable rate loans are beginning to reset now,” said RealtyTrac Chief Executive James J. Saccacio.

“Another significant factor in the increased level of foreclosure activity is that the number of REO filings (bank repossessions) is increasing dramatically, which means that a greater percentage of homes entering foreclosure are going back to the banks.”

With markets flooded with foreclosed properties and the pool of mortgage applicants shrinking rapidly, borrowers are finding it difficult or impossible to sell their properties on the market or at auction before the bank repossesses them. In the month of August there were 243,947 foreclosure filings, 1 for every 510 households in the U.S., the highest numbers since RealityTrac began publishing its report. 42,789 homes went unsold and were repossessed.

The states most affected in August were so-called “sun belt” states and Midwestern “rust belt” states that are reeling from the loss of manufacturing jobs. Nevada (one for every 165 households,) California (one in 224), Florida (one in 243), Georgia (one in 271), Ohio (one in 281), Michigan (one in 288),Arizona (one in 289), Colorado (one in 312), Texas (one in 532), and Indiana (one in 544).

When real estate markets were hot, borrowers in trouble were able to sell their homes for enough to pay off their loans. Now, with the markets flooded with foreclosures and prices dropping, borrowers in trouble may find out that they owe more than their house is worth.

August foreclosures zoom
Foreclosures more than double in past year [MarketWatch]
Foreclosures Surged 36% in August, Report Says [New York Times]
U.S. Foreclosures Continue to Surge [Wall Street Journal]


Edit Your Comment

  1. SaveMeJeebus says:

    I’m so glad that I will be buying a house at the peak of the Subprime Poison Train or whatever we are calling it.

  2. mrjimbo19 says:

    scary as hell to watch this happen, streets that were packed with families are now moving out to who knows where. It’s hard to believe so many people were careless to paying attention to the loan paperwork they signed

  3. SoCalGNX says:

    Realtytrac has been known to list foreclosures that show various stages of the process for one property. Thus the numbers may not reflect actually homes but simply the company’s accounting methods. Unless they have changed their method of numbers reporting, the count is suspect.

  4. hypnotik_jello says:

    there’s a sucker born every minute.

    really people, the only thing you need to remember is that, if it seems too good to be true, it probably is.

  5. hapless says:

    I find it disturbing that this is happening in states where the real estate markets weren’t inflated at all.

    Median home prices in Indiana, Ohio, and Michigan are only about double the median income!

  6. ArtDonovansDrunkenLovechild says:

    @SoCalGNX: “foreclosure” does not always mean losing your house. Someone can be foreclosed on, but keep thier house. Usually they will get sent a demand for payment of an amount of overdue payments. A lot of times this means the loss of the house, since people cant come up with that money and at this point its usually impossible to get a new loan to cover the difference. BUT some people can borrow that amount from family and friends, sell out of foreclosure, short sell to get out of the debt, ect. I think the stat is something like 70% of foreclosures leave the house, and less then half of them actually leave due to eviction/bank sale.

  7. Nytmare says:

    Why do ARMs reset in waves? Do people move into new homes in waves?

  8. MarkMadsen'sDanceInstructor says:

    Looks like it’ll be time for me to go shopping for a home soon.

    Honestly though, I feel no pity for people who lied about their income in order to qualify for a home. Now these people want to be bailed out? I for one don’t want my taxes raised to bail out other people’s lies and financial irresponsibility.

  9. theblackdog says:

    I have yet to see the home prices drop in the DC area. I still see McMansions going up and being advertised as “Starting from the low $600’s!”