TOPICS > Economy

Foreclosures Rise 6 Percent Between Jan., Feb.

BY Admin  March 12, 2009 at 3:00 PM EST

Foreclosed home; AP file photo

The foreclosure rate is up 30 percent over the level a year ago.

Nearly 291,000 homes across the country got at least one foreclosure-related notice last month, the Irvine, Calif.-based company said.

While foreclosures are highly concentrated in Western states and Florida, the problem has spread to Idaho, Illinois and Oregon as the U.S. recession deepens.

The rise in filings came despite temporary moratoriums by Fannie Mae and Freddie Mac, and major banks JPMorgan Chase, Morgan Stanley, Citigroup and Bank of America.

“The rate of foreclosure activity is increasing beyond the ability of even these types of moratoria to slow down,” Rick Sharga, senior vice president at RealtyTrac, told Reuters.

Last week, the Obama administration launched a massive foreclosure prevention program to encourage lenders to lower mortgage payments to affordable levels for borrowers. The administration has said the plan could help up to 4 million homeowners.

Two states contributing most to the increase were Florida and New York, where temporary bans on foreclosures ended.

Other states are moving to help families unable to pay their mortgages. On Wednesday, the Michigan House approved legislation that would give homeowners facing foreclosure a 90-day reprieve. The legislation now goes to Michigan’s Republican-led Senate, where its future is unclear.

Some banks have held off listing properties for sale even though the number of foreclosures continues to soar nationwide, Sharga told the Associated Press. There were around 700,000 such properties nationwide at the end of last year, making up a “shadow inventory” of unsold homes that could drag the housing crisis out even longer.

“It’s going to take us longer than you might anticipate to burn through [the] inventory of distressed properties,” he said.

One in every 54 U.S. households with mortgages got at least one filing notice last year, suggesting various temporary state programs to slow the process had little lasting effect.

Home prices began to topple in 2006, preventing many homeowners from selling or refinancing. Prices have tumbled by more than 26 percent since peaking nearly three years ago, according to Standard & Poor’s/Case-Shiller indexes.

The RealtyTrac report said lenders repossessed more than 74,000 properties in February as the worst recession in decades, falling home values and stricter lending standards continue to sap the U.S. real estate market.

Nevada, California, Arizona, and Florida had the nation’s top foreclosure rates. In Nevada, one in every 70 homes received a foreclosure filing, while the number was one in every 147 in Arizona. Rounding out the top 10 were Idaho, Michigan, Illinois, Georgia, Oregon and Ohio.

Among metro areas, Las Vegas was first, with one in every 60 housing units receiving a foreclosure filing. It was followed by the Cape Coral-Fort Myers area in Florida and five California metropolitan areas: Stockton, Modesto, Merced, Riverside-San Bernardino and Bakersfield.