California foreclosures surge 171 percent in Q3

IRVINE
October 30, 2006 7:30am

More than 37,000 homes went into the foreclosure process in California in the third quarter, a 171 percent increase over the same period in 2005, according to RealtyTrac, an Irvine-based foreclosure information company.

The California number was up 35 percent from the second quarter of 2006.

Nationally, 318,355 properties entered some stage of foreclosure during the third quarter of 2006, a 17 percent increase from the previous quarter and a 43 percent yearly increase from the third quarter of 2005.

The nation had a foreclosure rate of one foreclosure filing for every 363 households during the quarter, slightly higher than last quarter's rate of one foreclosure filing for every 425 households, but lower than the first-quarter rate of one foreclosure filing for every 358 households, according to RealtyTrac’s figures.

"Higher interest rates and a general softening of the real estate market are the two key factors contributing to the 43 percent increase in foreclosure filings from the third quarter of 2005," says James Saccacio, chief executive officer of RealtyTrac. "What our third quarter research appears to be showing is that the first wave of adjustable rate mortgages is having a negative impact on the number of homes going into foreclosure. With the volume of these loans -- more than $1 trillion of them due to adjust over the next 15 months -- this is a trend that definitely bears watching."

Colorado posted the highest foreclosure rate in the nation for the second consecutive quarter, reporting one new foreclosure filing for every 127 households -- 2.9 times the national average.

After declining almost 13 percent between the first and second quarter of the year, foreclosure activity in Colorado was back up 24 percent from the second to the third quarter, with 14,374 properties entering some stage of foreclosure -- the eighth highest foreclosure total in the nation.

Nevada moved up from having the sixth highest rate in the second quarter to the second highest rate in the third quarter, reporting one new foreclosure for every 156 households -- 2.3 times the national average. The state reported 5,561 properties in some stage of foreclosure during the quarter.

Florida, which had the ninth highest foreclosure rate in the country for the second quarter, took over the No. 3 spot from Texas during the third quarter, reporting one new foreclosure for every 182 households -- almost twice the national average.

With 40,136 properties in some stage of foreclosures during the quarter, Florida reported the highest number of foreclosure filings during the quarter, barely beating out Texas, which held the No. 1 spot for the previous two quarters.

Other states with foreclosure rates ranking them in the nation's top 10 for the third quarter included Georgia, Michigan, Texas, Indiana, Utah, Ohio and Illinois.

"While the overall number of foreclosures represents a return to more or less normal levels, there are pockets of the country that are being hit more severely," says Mr. Saccacio. "States with underlying economic issues, such as high unemployment or depreciating home prices will continue to outpace the rest of the country in the total number and rate of foreclosures."