By Stephanie Armour, USA TODAY -
The nation's already alarming pace of home foreclosures is poised to
accelerate through the rest of the year, according to RealtyTrac,
which re****ted Tuesday that foreclosure filings jumped 57% in March
from March 2007.
The re****t painted a grim picture of growing numbers of people unable
to make their mortgage payments. Bank repossessions more than doubled
in March. Foreclosure filings surged 57% last month from March 2007,
with one in every 538 households receiving a foreclosure filing during
the month, RealtyTrac said. Nevada, California and Florida were the
states hardest hit. In total, more than 234,000 homes were in some
stage of foreclosure in March.
CHART: Foreclosures by state
One factor driving up foreclosures has been the number of adjustable-
rate loans that have reset to higher rates, raising the amount that
homeowners owe each month. Because ARM resets will peak later this
spring, the pace of foreclosures could rise further into the third or
fourth quarter of the year, says Rick Sharga of RealtyTrac.
Job losses and shrinking home equity are contributing to the bleak
outlook.
"We could argue this is the worst housing downturn ever," says Mark
Zandi, chief economist at Moody's Economy.com. "Negative equity and
unemployment are the driving factors. Things are getting worse, not
better."
Wayne Willsey of Crestview, Fla., is facing possible foreclosure and
has seen his monthly payment soar from $2,100 to $4,000 because of his
ARM loan. He works for the local power company.
"I keep praying; it's really hurt the family bad," Willsey says. "I'm
55, and it's hard to start all over again."
"This isn't a subprime problem," says Dean Baker, co-director of the
Center for Economic and Policy Research. "The underlying issue is
housing prices are falling. It's going to get worse. Subprime
(foreclosures) may have peaked and will start to trail off. In terms
of the rest of the market, we're just beginning."
Some homeowners who might have planned to refinance into lower-rate
loans are finding they can't because falling prices mean they owe more
on their mortgages than their homes are worth.
"Any time you take on an ARM, you have to understand there's going to
be risk, and in many cases, that wasn't explained," says Brian
Bethune, an economist at Global Insight forecasting.
Still, Celia Chen, director of housing economy at Moody's Economy.com,
notes that ARM resets might not be so bad for some homeowners, since
the Federal Reserve has aggressively cut interest rates. In some
cases, an ARM will actually reset down to a lower rate.
Zandi adds: "What we're seeing that's new is people who are under
water" =97 whose loans exceed their home's value =97 "walking away" from
those homes.
Foreclosures by state
Foreclosure filings 1 filing for every X household (rate) Change
from Feb. '08 Change from March '07
United States 234,685 538 4.9% 57.4%
Alabama 649 3,251 -8.1% -19.5%
Alaska 192 1,440 29.7% 95.9%
Arizona 9,199 283 -4.7% 106%
Arkansas 1,210 1,053 -13.1% 140%
California 64,711 204 20.7% 106%
Colorado 6,180 339 -8.3% -1.4%
Connecticut 2,126 674 -3.3% 40.2%
Delaware 192 1,994 -15.8% 34.3%
District of Columbia 307 921 -9.7% 6,040%*
Florida 30,254 282 -6.8% 112%
Georgia 11,047 351 44.8%* 63.2%
Hawaii 120 4,167 -16.1% 84.6%
Idaho 657 937 -14.6% 85.1%
Illinois 8,623 603 -1.5% 10.3%
Indiana 5,119 538 -0.5% 18.2%
Iowa 512 2,579 8.3% -11.7%
Kansas 710 1,701 55.7% 58.8%
Kentucky 691 2,733 45.2% -1.3%
Louisiana 626 2,923 -3.7% 8.1%
Maine 196 3,526 -3.5% 201%*
Maryland 4,275 538 6.5% 343%
Mass. 5,573 486 42.7% 59.4%
Michigan 9,494 475 -13.4% 10.3%
Minnesota 1,323 1,726 -15.8% 63.7%
Mississippi 188 6,604 27.0% 100%
Missouri 3,368 779 -2.9% 35.0%
Montana 154 2,805 -14.9% 31.6%
Nebraska 274 2,828 18.6% -23.3%
Nevada 7,659 139 24.2% 61.7%
New Hamp****re 414 1,425 -35.6% 260%*
New Jersey 4,482 775 -19.9% -6.2%
New Mexico 342 2,486 -32.1% 4.9%
New York 5,088 1,554 -3.0% 37.1%
North Carolina 3,298 1,222 -18.6% 1.8%
North Dakota 8 38,475 -63.6% -66.7%
Ohio 11,273 448 8.5% 37.1%
Oklahoma 1,447 1,111 -19.2% 27.2%
Oregon 1,633 972 3.1% 119%
Pennsylvania 2,900 1,880 20.1% -0.7%
Rhode Island 398 1,130 -10.8% 26.0%
South Carolina 932 2,120 33.5% 174%*
South Dakota 16 22,051 -38.5% -50.0%
Tennessee 3,907 686 -21.2% 22.9%
Texas 10,700 862 -12.7% -16.1%
Utah 1,230 733 -4.5% 93.4%
Vermont 2 154,779 -50.0% 100%*
Virginia 4,933 655 17.8% 368%*
Wa****ngton 3,830 705 72.52* 120.6%
West Virginia 68 12,909 74.4% -28.4%
Wisconsin 2,073 1,222 -13.4% 150.7%
Wyoming 82 2,917 28.1% 720%*
*Actual increase may not be as high due to data collection.
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