(NEW YORK) The number of homes entering foreclosure, being auctioned and repossessed by banks jumped by 36 per cent in August from the month before, with cities in California, Florida and Nevada showing the biggest increases, according to a report scheduled to be released yesterday.
Going, going: Foreclosure filings rose the most in states that have struggled with job losses and in states where the property boom was most frenzied --
The report from RealtyTrac, a company that tracks public foreclosure filings nationally, attributes a big part of the rise to mortgage companies being forced to take ownership of homes because borrowers have fallen behind on payments and their properties were not sold at auction.
The sharp increases provide more evidence that the troubles in the housing and mortgage markets may prove long-lived, given that home prices are falling in many parts of the country, there is a large inventory of unsold homes and the job market is starting to weaken.
Housing specialists are also concerned about a big wave of adjustable-rate mortgages that will be reset to higher, variable interest rates in the coming months.
Nationally, there were 243,947 foreclosure filings in the month, accounting for one in every 510 households, according to the report. That is up 36 per cent from July and 115 per cent from August 2006.
Filings were up 48 per cent from July in California, 77 per cent in Florida and 21 per cent in Nevada, which has the highest foreclosure rates in the country at one in 165 households.
Foreclosure filings rose across most of the country, and the biggest increases were in Midwestern states that have struggled with job losses in manufacturing industries and in states where the real estate boom was most frenzied.
RealtyTrac's data is based on courthouse filings from 2,500 of the nation's more than 3,000 counties. Some mortgage industry officials caution that data based on those filings may be incomplete or may lead to double counting of some homes.
Meanwhile another survey showed that confidence among US chief executives fell this quarter to the lowest point in four years, causing more companies to scale back hiring plans.
According to the Business Roundtable in Washington, the group's economic outlook index fell to 77.4, the lowest since the third quarter of 2003, from 81.9 in the second quarter. Still, a reading greater than 50 signals expansion.
The decline in hiring plans raises the risk that employment won't pick up after payrolls fell in August for the first time in four years. -- Reuters, Bloomberg
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