US Foreclosures in November Rose 68% from Prior Year

According to data compiled by RealtyTrac Inc., U.S. home foreclosures rose 68 percent in November from a year earlier as adjustable-rate mortgages left subprime borrowers unable to meet higher payments.  
  
RealtyTrac reported that there were 201,950 foreclosure filings in November, including default notices, auction letters and bank repossessions, down 10 percent from October's total. California, Florida and Ohio had the most filings and Nevada had the highest foreclosure rate.  
  
Interest rates increased on more than $87 billion of subprime mortgages in the third quarter, and another $84 billion will reset in the fourth quarter, according to New York-based analysts for Credit Suisse Group. Foreclosures may surge next year as payments rise on about 1 million home loans, said Rick Sharga, executive vice president for marketing at RealtyTrac.  
  
"I wouldn't be surprised if we're at the 230,000 to 250,000 level'' for monthly foreclosures in the first quarter, Sharga said.  
  
Foreclosed properties are adding to the supply of unsold homes and deepening the U.S. housing recession. Existing home sales will fall 12 percent and home prices will drop 4.5 percent next year, according to Washington-based Fannie Mae, the biggest U.S. mortgage buyer. The inventory of unsold houses is at 11 months, an eight-year high.  
  
Fed Rules  
  
The Federal Reserve yesterday proposed new rules aimed at lending practices that have contributed to foreclosures, including a ban on low-documentation loans, limits on penalties for borrowers who prepay their debt and requiring lenders to determine whether borrowers can afford loans that reset to higher rates.  
  
The Fed proposals "could inadvertently cause a short-term problem because you'll end up with stringent loan standards that limit the opportunities for people who want to refinance,'' Sharga said.  
  
California's 39,992 filings in November were more than double its total from a year earlier and 21 percent fewer than in October, according to RealtyTrac. Florida had 29,238 filings, more than triple last year's total and down 3 percent from October.  
  
Ohio had 16,308 filings, almost double the number a year ago and down 5.6 percent from October, said RealtyTrac, an Irvine, California-based seller of foreclosure information with a database of more than 1 million properties.  
  
California  
  
California, the most populous U.S. state and the most expensive real estate market, had five cities whose foreclosure rate was among the top 10 in the nation, RealtyTrac said. Stockton ranked first with one filing for every 99 households, Modesto was second with one for every 104 households and Merced was third with one for every 106 households. Vallejo-Fairfield ranked sixth and Riverside-San Bernardino was ninth.  
  
The Las Vegas metropolitan area had the fourth-highest foreclosure rate, with one filing for every 122 households. Detroit was fifth with one for every 138 households, according to RealtyTrac. Greeley, Colorado, ranked seventh, Cape Coral- Fort Myers, Florida, was eighth and Miami was tenth. The national foreclosure rate was one for every 617 households.  
  
Nevada's foreclosure rate, the highest of any state, was more than four times the national rate at one filing for every 152 households. Florida was second with one filing for every 282 households and Ohio was third with one for every 307 households.  
  
The decline from October, the first monthly drop of 10 percent or more since April 2006, "s the type of decline we could have anticipated for this month because we're coming out of a cycle of resets,'' Sharga said.