Sharp foreclosure climb continues nationwide

Foreclosure activity rose 25% in October from the same period a year ago, according to the latest data from RealtyTrac Inc. of Irvine, Calif. The report shows that the number of properties receiving foreclosure filings, which include default notices, auction sale letters and bank repossessions, climbed to 279,561 in October, up 5% from September and up 25% from a year ago. This translates into one in every 452 homes receiving a foreclosure notice in October. However, the data showed a sharp decline in foreclosure filings in several states, such as California, that had passed legislation mandating certain waiting periods before lenders could foreclose on a property. Under California’s Bill 1137, for example, lenders must contact homeowners prior to filing a foreclosure notice to ensure that they are aware of all of their options, and wait 30 days before proceeding. The legislation is aimed at encouraging lenders to make loan modifications rather than foreclose on properties — however, it doesn’t force lenders to modify loans. Notice of default filings in California fell 44% in October, although total filings were up 13%. The legislation appears to delay, rather than stop, the foreclosures, James Saccacio, chief executive of RealtyTrac, said in a statement. “While the intention behind this legislation — to prevent more foreclosures — is admirable, without a more integrated approach that includes significant loan modifications, the net effect may be merely delaying inevitable foreclosures,” he said. “And in the meantime, the apparent slowing of foreclosure activity understates the severity of the foreclosure problem in those states.” Nevada continues to lead the country in foreclosures, with the highest rate in October. Foreclosure filings were reported on 14,483 Nevada properties in October, up 119% from a year ago. This means that about one in every 74 units were in foreclosure in October, more than six times the national average. Arizona posted the second-highest foreclosure rate, with one in every 149 homes receiving foreclosure filings. Florida ranked third, with one in every 157 homes receiving a foreclosure notice. The other states in the top 10 were California, Colorado, Georgia, Michigan, New Jersey, Illinois and Ohio.