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Rates up 5 percent in quarter
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File photo by K.M. Cannon.
A foreclosed home is shown April 16 in Summerlin. Nevada had the highest foreclosure rate in the nation in the July-September quarter. » Buy this photo
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THE ASSOCIATED PRESS
Updated: Apr. 10, 2012 | 9:34 a.m.
WASHINGTON -- The number of households caught up in the foreclosure crisis rose more than 5 percent from summer to fall as a federal effort to assist struggling borrowers was overwhelmed by a flood of defaults among people who lost their jobs.
On a state-by-state basis, Nevada had the nation's highest foreclosure rate in the July-September quarter. Arizona was No. 2, followed by California, Florida and Idaho. Rounding out the Top 10 were Utah, Georgia, Michigan, Colorado and Illinois.
Banks repossessed nearly 88,000 homes in September, up from about 76,000 a month earlier.
The foreclosure crisis affected nearly 938,000 properties in the July-September quarter, compared with about 890,000 in the prior three months, according to a report released Thursday by RealtyTrac Inc. That puts foreclosure-related filings on a pace to hit about 3.5 million this year, up from more than 2.3 million last year.
Unemployment is the main reason homeowners are falling into trouble. While the economy is likely out of recession, the unemployment rate -- now at a 26-year high of 9.8 percent -- isn't expected to peak until the middle of next year.
Mortgage companies sometimes allow unemployed homeowners to defer three to six months of payments while they are looking for a job. But there's little else they can do.
"The sheer scale of the problem is preventing the loan modification programs from having the kind of impact we'd all like," said Rick Sharga, RealtyTrac's senior vice president for marketing.
Last week, the Obama administration hailed a milestone in its mortgage relief effort, reporting that 500,000 homeowners have received help since the program was launched in March. But new defaults are still exceeding the number of borrowers getting help.
Mortgage companies have slowed down the pace of foreclosures as they evaluate whether borrowers qualify for the administration's program. Analysts, however, forecast that many of those homeowners won't qualify, and foresee a new wave of foreclosed properties hitting the market next year. That's likely to further depress home prices.
Some homeowners are in such a massive financial hole that it's hard to design a modification that will actually provide lower payments. And some have avoided paying their monthly bills for a long time.
Carlos Estrada, 57, of Tulare, Calif., for example, hasn't made a mortgage payment since February 2008. The construction jobs that kept him working more than 40 hours a week during the housing boom have all but vanished.
Earlier this year, he turned down a modification offer from Bank of America because it would have incorporated his unpaid balance and raised his monthly bill. But a bank spokeswoman said Wednesday that Estrada's foreclosure sale had been postponed until late next month while the bank reviews whether he can qualify for help.
"I'm still here waiting for them to help me resolve this situation," Estrada said in Spanish.
According to the RealtyTrac report, there were nearly 344,000 foreclosure-related filings last month, down 4 percent from a month earlier but still the third-highest month since the report started in early 2005.
It was the seventh-straight month in which more than 300,000 households received a foreclosure filing, which includes default notices and several other legal notices that homeowners receive before they finally lose their homes.
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Home prices increasing is a falsehood. The only reason the market hasn't slipped further is because the banks are controlling the supply. In the next three years it will fall further as the foreclosures are released and any investor that buys now is a moron. In another year they will be able to get comps to the homes they are buying now for 10% less. Walk away from your houses, Let the banks deal with the problems with their bailout money. Take a hit on your credit and in a year or two buy another house twice as big for half the price. Wakeup America! Noone is going to help you, so you have to help yourself! Short sale, deed in lieu, file! Give these houses back to the banks and let them sort the mess. Before any of you start to ridicule me, I qualified for a house I COULD afford, put a hefty down payment on it, Then lost more than 2/3 the value, so I'm giving myself my own bailout. Do not forget, it is YOUR money being used to bail these banks out. Is that how you wanted to spend it??
Carlos, the unemployed Mexican who cannot speak English has lived in his Home for free for nearly 2 years.
That is truly AMAZING! I have never heard of anyone living for free for that long! Wow.
I suppose the Loan Modification comes in Spanish with Spanish interpreters.
And there are thousands just like Carlos out there living for Free in homes for years.
What impact is this going to have in America?
Who is going to pay for this if the Carlos types are not?
Surrgd, You are not paying for schools for my kids because you are a renter. School taxes are charged on a home you own( property taxes). Mine are $4000 a year. You are paying for Juan Carlos, who is here illegally, to be able to press 2 for spanish and recieve health care for free. Get your taxes straight!!