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U.S. Foreclosure Activity Up 100 Percent in Third Quarter

Record level foreclosure activity was reported in the U.S. during the third quarter. Filings increased in 45 out of 50 states, leaving many areas embroiled in a full blown foreclosure crisis.

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U.S. Foreclosure Statistics: Q3 2007

Total Filings	% Chg from Q3 2006	1 Filing for Every # Households
635,159	100%	196

Source: RealtyTrac

In the Q3 2007 U.S. Foreclosure Market Report released November 1, RealtyTrac reported third quarter foreclosure activity increased 100 percent in a year-over-year comparison. Out of 50 states, 45 had increases in foreclosure filings compared to the same time last year. Across the nation, there was one foreclosure filing for every 196 households.

States Posting Top Foreclosure Rates

State	% Chg from Q3 2006	1 Filing for Every # Households
Nevada	202%	61
California	297%	88
Florida	115%	95
Michigan	111%	102
Ohio	137%	107
Colorado	31%	109
Arizona	203%	112
Georgia	68%	142
Indiana	28%	196
Texas	12%	205

Source: RealtyTrac

Nevada posted top foreclosure rates once again during the third quarter. There was one foreclosure filing for every 61 households; activity increased 202 percent in a year-over-year comparison.

California and Florida were not far behind. In California, there was one filing for every 88 households. Foreclosure activity increased nearly 300 percent. In Florida, one in every 95 homes was in some stage of foreclosure. Filings were up more than 115 percent.

North Dakota, South Dakota, and Vermont had the lowest foreclosure rates.

Increased Foreclosures Expected In the Coming Months

U.S. foreclosure rates are expected to remain at above normal levels for the next 18 months according to congressional testimony from Undersecretary of Treasury for Domestic Finance Robert Steel.

'Over the next 18 months, we expect the foreclosure rate to remain elevated above its historic level,' Steel said on November 2 . 'A rising foreclosure rate during a housing downturn is not surprising, but largely because of lax underwriting in recent years, especially in the subprime market, a higher than usual number of homeowners will face delinquency during the next year-and-a-half.'

Steel did not offer an estimate of how many filings there would be. In September, the Bush Administration predicted there would be 500,000 more foreclosures before the end of 2007, while the Joint Economic Committee has predicted more than 2 million by the end of 2008.

New evidence suggests the foreclosure crisis will be wider and deeper than previously reported. Most predictions have been based on subprime loans only. If prime borrowers begin to default in large numbers as loans reset and negative amortization becomes a problem, foreclosure rates have the potential to climb much higher than anyone has estimated.