Big jump in US foreclosure filings, bank repossessions

April 16, 2008
Big jump in US foreclosure filings, bank repossessions

SAN FRANCISCO - UNITED States foreclosure filings jumped 57 per cent
and bank repossessions more than doubled last month compared to a
year ago, as adjustable mortgages increased and more owners gave up
their homes to lenders.

More than 234,000 properties were in some stage of foreclosure,
RealtyTrac, a seller of default data, said yesterday in a statement.
That meant one in every 538 US households received a filing last
month.

Nevada, California and Florida had the highest foreclosure rates.
Filings also rose 5 per cent from February.

About US$460 billion (S$628 billion) of adjustable-rate loans are
scheduled to reset this year, according to analysts at Citigroup.

Auction notices rose 32 per cent from a year ago, a sign that more
defaulting home owners are 'simply walking away and deeding their
properties back to the foreclosing lender' rather than letting the
home be auctioned, RealtyTrac chief executive officer James Saccacio
said in the statement.

'We're not near the bottom of this at all,' said Mr Kenneth Rosen,
chairman of hedge fund Rosen Real Estate Securities, who also heads
the Fisher Centre for Real Estate at the University of California at
Berkeley.

'The foreclosure process will accelerate throughout the year,' he
added.

Rising foreclosures will add more inventory to an already glutted
market, keep home prices down through at least next year, and thwart
efforts by the US Congress and President George W. Bush to help home
owners avoid default, Mr Rosen said in an interview.

About 2.5 million foreclosed properties will be on the market this
year and the next, Lehman Brothers said in an April 10 report, while
US home-price declines will probably double to a national average of
20 per cent by next year.

Borrowers who owe more on their mortgages than their homes are worth
may be buffeted by increasing job losses in a 'very substantial
recession', Mr Rosen said.

About 8.8 million borrowers had home mortgages that exceeded the
value of their property, Moody's Economy.com said last week.

'At least two million jobs will be lost because of this recession, so
we'll get a cumulative negative spiral,' Mr Rosen said. 'A normal
recession is 10 months. We think this one may be twice as long.'

Bank seizures climbed 129 per cent from a year earlier, according to
RealtyTrac, which has a database of more than one million properties
and monitors foreclosure filings, including defaults notices, auction
sale notices and bank repossessions.

March was the 27th consecutive month of year-on-year monthly
foreclosure increases. In February, foreclosure filings rose 60 per
cent.

EastLiving.com.sg

Contact Stuart Chng: (65) 9691 9907
Email: stuart.chng@eastliving.com.sg

EastLiving - Singapore Property and Real Estate DB