How Many Foreclosed Homes Are On Your Block? - December 11. 2008

Is the housing market finally reaching a bottom? In a report released by RealtyTrac, the number of U.S. homeowners thrust into the housing crisis declined in November as newly enforced state laws helped prevent further foreclosures.

Those newly enacted state laws, which lengthened the foreclosure process and adjusted loan modification programs, curtailed the number of foreclosures for any homeowner whose mortgage is held by Fannie Mae or Freddie Mac.

In the report, foreclosures for November dropped 7% from October’s reading, but compared to this time last year, the number of foreclosures jumped 28% year-over-year. That amounts to one in every 488 households received a filing for foreclosure. A filing is defined as any notice of default, auction sale or bank repossession.

On a national scale, more than 260,000 homes received at least one notice. Within those figures, more than 78,000 domiciles were repossessed by their lenders in November. Delve deeper into America’s foreclosure crisis at Bloomberg.

Housing experts have stated that nearly 70% of all subprime foreclosure in the U.S. are beyond the controls of mortgage modification programs. With that, mortgages that are more than 30 days past due in the 3rd quarter has increased by nearly 7%, and those that are already in foreclosure increased by almost 3% during the quarter, according to the Mortgage Bankers Association.

The FDIC and the Federal Reserve estimate that banks will foreclose on more than 2.2M homes by the end of the year. That would put the rate of foreclosures at more than double last year’s rate of 1M homes, before the country fell into the housing crisis.

Additionally, RealtyTrac revealed that Nevada remains the worst state for foreclosures with one in every 76 households receiving some sort of notice. Nevada’s rate is more than six times that of the national average and marks the 23rd consecutive month that the state has led the nation in foreclosures.

With other states, Florida ranked behind Nevada with one in every 173 households receiving a notice, followed by Arizona, California, Michigan, Georgia, Ohio, Colorado, Utah and Idaho, to round out the top ten.

As for the total number of actual claims filed, California was the leader in that department, with more than 60,000 filings in November, up 51% from the previous year.

In retrospect, “I'm afraid we're looking at a bit of a false promise," Rick Sharga, senior price president at RealtyTrac announced today. He went on to add that “It's basically a stay of execution. I am fearful that we're going to see a pretty significant spike come January. Most economists are of the opinion that until you stabilize housing, the rest of the economy is not going to get better. For all the hundreds of billions of dollars that have been injected into the financial system, we still see the foreclosure rates go up."

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