May 15 (Bloomberg) — Mortgages in foreclosure rose 62 percent in April and the number of Americans falling behind on home loans will climb this year as home prices fall and lending standards are tightened, RealtyTrac Inc. said.
There were 147,708 notices of default, scheduled auctions and bank repossessions last month, led by California, Florida and Ohio, the Irvine, California-based seller of foreclosure data said today. The median U.S. home price fell 1.8 percent in the fourth quarter, according to a separate report by the National Association of Realtors.
Foreclosures are being “fueled by a combustible mix of risky loans taken out in the last few years — many in the subprime market — and slowing home price appreciation,” said James Saccacio, chief executive officer of RealtyTrac, in a statement.
Mortgage lenders are raising credit standards after the number of loans entering foreclosure rose to an all-time high in the fourth quarter. The 2007 median price for an existing home likely will decline 1 percent to $219,800, the National Association of Realtors said last month, the first drop since the real estate group began keeping records in 1968 and probably the first decline since the Great Depression. Falling prices make it more difficult for homeowners to avoid foreclosure by selling.
More than 50 subprime lenders have folded, filed for bankruptcy protection or sought a buyer since January 2006.
California Leads
April foreclosures were down about 1 percent from the more than 149,000 filings in March, the most since RealtyTrac started compiling such information in January 2005.
“Whether the decrease in April is the beginning of a similar trend this year remains to be seen, but we expect foreclosure activity to at least stay above last year’s levels for the remainder of 2007,” Saccacio said.
California had the largest number of foreclosure filings last month, with 30,505, followed by Florida at 14,318 and Ohio with 11,431, RealtyTrac said. All three states had advanced from a year earlier, with Ohio the only one to show an increase from the previous month. Ohio’s foreclosure activity rose 39 percent from March and 135 percent from April 2006.
Michigan, Detroit
Michigan was down “significantly” in April from March, said Daren Blomquist, a spokesman for RealtyTrac, in a telephone interview. “There are still a lot of foreclosures, but anecdotally there have been so many that some of the counties are having trouble keeping up with the filings.”
Metropolitan Detroit led the U.S. in foreclosures last year, as the auto industry’s losses left more than 350,000 people jobless, giving the state the highest U.S. unemployment rate.
Nevada and Colorado posted the highest foreclosure rates, or foreclosures per household, in April. Nevada had one filing for every 232 households, the highest for the fourth straight month. Nevada’s foreclosure activity more than tripled from a year earlier. The state’s filings fell 21 percent in April from March.
Colorado’s filings rose 57 percent from April 2006 through last month, putting it at a rate of one for every 314 households. Colorado’s fell 7 percent in April from March, RealtyTrac said.
Connecticut’s foreclosure rate last month jumped to the third-highest from 15th, with one filing for every 329 households, or more than double the national average, said RealtyTrac. That shows that more higher-priced homes are being affected, though part of the increase was caused by better data collection, RealtyTrac said.
In the first quarter, properties valued at $750,000 or more made up about 2.5 percent of all foreclosures, the highest since the first quarter of 2005.
“It’s not just homes that are in poor areas or valued less going into foreclosure,” said Blomquist. “The problem is widespread.”
Houses valued at less than $225,000 accounted for 56 percent of foreclosure filings last quarter, down from an average of about 65 percent during the two years RealtyTrac has collected the data.
To contact the reporter on this story: Hui-yong Yu in Seattle at [email protected] .
Last Updated: May 15, 2007 10:19 EDT
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