States in the Midwest Face Unprecedented Foreclosures
January's foreclosure numbers demonstrate that foreclosure activity is continuing on its upward trend, substantially increasing from a year ago in many states.
According to the latest data from RealtyTrac, foreclosure filings, including default notices, auction sales notices and bank repossessions, were reported on 233,001 properties during the month, an increase of 8% from December and an increase of nearly 57% from January 2007.
"However, the 8% monthly increase in January is not as precipitous as the 19% spike we saw in January of 2007, and several key states actually experienced decreasing foreclosure activity from the previous month," said James Saccacio, chief executive officer of RealtyTrac. "It could be that some of the efforts on the part of lenders and the government - both at the state and federal level - are beginning to take effect. The big question is whether those efforts are truly helping homeowners avoid foreclosure in the long term or if they are just temporarily forestalling the inevitable for many beleaguered borrowers."
Ohio and Michigan documented totals of more than 10,000 properties with foreclosure filings reported in January. Illinois was also in the top 10.
Michigan documented the nation's third highest state foreclosure for 2007, with 1.9% of its households entering some stage of foreclosure during the year. A total of 136,205 foreclosure filings on 87,210 properties were reported in the state during the year, a 68% increase in total filings from 2006. Michigan foreclosure activity dipped 17% from the third quarter to the fourth quarter, but its December foreclosure filing total was still up more than 70% from December 2006.
Ohio's total foreclosure filings, 153,196, and total properties entering some stage of foreclosure, 89,979, both ranked third highest among the states for 2007. The state's foreclosure filings increased 88% from 2006, and its 2007 foreclosure rate was the nation's sixth highest, with 1.8% of the state's households entering some stage of foreclosure during the year. Ohio's high ranking for the year came despite a dip in foreclosure activity in the fourth quarter, when foreclosure filings decreased 2% from the previous quarter. The state's December foreclosure filings were down 26% from November but still up 64% from December 2006.
As expected, the number of properties entering some stage of foreclosure in 2007 was up in the vast majority of the nation's 100 largest metro areas, with 86 metros reporting increases from 2006.
"Most of the metro areas with the highest foreclosure rates were either cities like Stockton and Las Vegas, which experienced meteoric growth and unsustainable price appreciation over the past few years, or cities like Detroit, which are undergoing a more widespread economic downturn along with higher unemployment rates," said Mr. Saccacio.
In 2007, 15 of the metro areas with the top 20 metro foreclosure rates were located in four states: California with six, Ohio with four, Florida with three and Michigan with two.
Detroit registered the highest foreclosure rate among the nation's 100 largest metro areas, with close to 5% of its households entering some stage of foreclosure during the year, 4.8 times the national average and up from about 3% in 2006. A total of 72,616 foreclosure filings on 41,273 properties were reported in the Detroit metro area in 2007, up 68% from 2006. The other Michigan metro area with a foreclosure rate in the top 20 was Warren-Farmington Hills-Troy at No. 17.
Cleveland's 2007 foreclosure rate, 2.9% of households entering some stage of foreclosure during the year, ranked sixth highest nationally and was the highest of any Ohio metro area on the list. A total of 49,071 foreclosure filings on 27,848 properties were reported during 2007, up 112% from 2006. Other Ohio metros with foreclosure rates in the top 20 were Akron at No. 12, Dayton at No. 15 and Toledo at No. 19.
These are grim numbers for the hundreds of thousands of homeowners trapped by rising mortgage payments, stagnant home prices and tightened credit markets. "But all is not gloom," says Alexis McGee, president of Foreclosures.com.
Although tens of thousands of other homeowners are in foreclosure, Ms. McGee says most have not lost their home to foreclosure, as they have found solutions to their mortgage woes, ranging from workouts through lenders or other private and public organizations to rising home prices that make refinancing and home sales plausible, and growing local and national economies.
As industry and experts continue to debate housing slumps, a possible recession, and the subprime mortgage mess, every month thousands more Americans lose their homes to foreclosure.
At the same time, even with President Bush's FHA Secure program from late December, she said, tens of thousands more homeowners face pre-foreclosure. These are homeowners that often don't qualify for the program because they have too little equity in their property or are out of work, or just too far behind the financial eight-ball to avoid a notice of mortgage default or pending foreclosure auction.
"What many of these overextended homeowners don't realize, though, is that their situation is not hopeless. They usually have viable alternatives to lose their house to foreclosure." (c) 2008 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com/ http://www.sourcemedia.com/