“U.S. home foreclosures almost doubled in October from a year earlier as subprime borrowers struggled to make higher payments on their adjustable-rate mortgages, according to data compiled by RealtyTrac Inc.
There were 224,451 foreclosure filings, including default notices, auction notices and bank repossessions, a 94 percent jump from October 2006 and a 2 percent increase from the previous month, RealtyTrac reported today. California had the most filings with 50,401 and Florida was second with 30,190. Nevada had the highest rate, one for every 154 households, more than triple the national average.
Bank repossessions increased 35 percent, providing ‘evidence that more homeowners who enter foreclosure are losing their homes,’ James Saccacio, chief executive officer of RealtyTrac, said in a statement.”
“The number of defaults and foreclosures is expected to continue to rise as payments on adjustable mortgages rise to levels that some homeowners can’t afford. Roughly $1.5 trillion in adjustables are scheduled to reset over the next two years, according to figures compiled by Credit Suisse. Though rates on traditional adjustable mortgages rise and fall with market interest rates, many of those written during the last few years of the lending boom will automatically reset to higher payments after their two- or three-year ‘starter’ rates expire.”
From Associated Press:
“While the number of filings is still up year-over-year, it has leveled off in the last two months after hitting a high for the year in August.
Efforts by lenders under pressure to modify loan terms for at-risk borrowers could explain the slower sequential increase in filings, but the trend is likely more a result of a lag in filings after interest rate changes on adjustable-rate mortgages, said Rick Sharga, RealtyTrac's vice president for marketing.”