Foreclosure heat still rising

Foreclosure heat still rising
Housing » U.S. rate up by smallest amount in four years, but Utah activity is up 90 percent.

Staff And News Services
Salt Lake Tribune

The pace of foreclosure-related filing nationally may finally be slowing down, but in Utah the rate continues to increase dramatically.

RealtyTrac Inc. said the number of U.S. households facing foreclosure in February grew 6 percent from the year-ago level, the smallest annual increase in four years. By comparison, foreclosure activity in Utah jumped 90 percent.

Nationally, more than 308,500 households, or one in every 418 homes, received a foreclosure-related notice, the company reported. That was down 2.3 percent from January.

In Utah, where the real estate market began to slump two years later than most other parts of the country, 3,430 households, or one in every 275 homes, received a notice. Utah has the sixth-highest rate of filings in the report.

The filings include a range of actions, from default notices, in which homeowners are simply behind in their payments, to notices that a bank is taking possession of a home.

Hundreds of thousands of homeowners nationally are still being evaluated for help under loan-modification programs.

But many analysts say most of those borrowers will eventually lose their homes, sparking a new round of filings later this year.

"It's premature to declare victory just yet," said Rick Sharga, a RealtyTrac senior vice president.

Banks repossessed nearly 79,000 homes last month, down 10 percent from January but still up 6 percent from February 2009.

The RealtyTrac report follows an encouraging report last month from the Mortgage Bankers Association. It said the percentage of borrowers who had missed just one payment on their home loans fell to 3.6 percent in the October to December quarter, down from 3.8 percent in the third quarter.

Although that was a surprising piece of positive news, foreclosures were still at record high levels. The number of borrowers who have either missed a payment or are in foreclosure was at 15 percent.

A record 2.8 million households were threatened with foreclosure last year, Realty-Trac said, and the number is expected to rise to more than 3 million homes this year.

The foreclosure crisis forced the federal government and several states to come up with plans to prolong the process so delinquent borrowers can try to find help. But those efforts have barely dented the problem.

The Obama administration's $75 billion foreclosure prevention program has helped only 116,300 homeowners in the past year.

Foreclosed homes are typically sold at steep discounts, lowering the value of surrounding properties. Cities lose property tax dollars from homes that sit empty and lower property values.

Economic woes, such as unemployment or reduced income, are expected to be the main catalysts for foreclosures this year. Initially, lax lending standards were the culprit, but homeowners with good credit who took out conventional, fixed-rate loans are the fastest growing group of foreclosures.

Among states, Nevada posted the nation's highest rate of foreclosure-related filings, though they there were down 7 percent from January and down more than 30 percent from a year earlier. It was followed by Arizona, Florida, California and Michigan. Rounding out the top 10 were Utah, Idaho, Illinois, Georgia and Maryland.

The metro area with the highest foreclosure rate in February was Las Vegas. Though one in every 90 homes there received a foreclosure filing, filings were down 9 percent from a month earlier. Filings in the No. 2. metropolitan area, the Cape Coral-Fort Myers area in Florida, were up 31 percent from a month earlier.

Also topping the list of foreclosure hot spots were the California metro areas of Modesto, Riverside-San Bernardino-Ontario and Stockton.