Foreclosure filings jump 24%

Source: CNNMoney.com

NEW YORK (CNNMoney.com) — Foreclosure activity skyrocketed in March and the first quarter of 2009 to their highest levels on record as banks lifted moratoria on filings.

Total foreclosure filings – which include default papers, auction sale notices and repossessions – reached 803,489 in the first quarter, according to a report released Thursday by RealtyTrac, on online marketer of foreclosed properties. That is a 24% jump over a year earlier and a 9% increase compared to the previous quarter.
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Of those filings, 341,180 happened in March – a 17% increase from February and a 46% jump from March 2008.

The March and first quarter numbers were the highest monthly and quarterly totals since RealtyTrac began reporting in January 2005.

“In the month of March we saw a record level of foreclosure activity – the number of households that received a foreclosure filing was more than 12% higher than the next highest month on record,” said James J. Saccacio, chief executive officer of RealtyTrac, in a statement.

“Since much of this activity was in new foreclosure actions, it suggests that many lenders and servicers were holding off on executing foreclosures due to industry moratoria and legislative delays,” he added.

The one bright spot in the report was that fewer homes were lost to bank repossessions in March and the first quarter, falling 3% from February and 13% from the previous quarter, the report said.

Foreclosures have hit the economy hard. Housing prices have plummeted and some homeowners are severely underwater – meaning they owe more than their homes are worth. That can remove the incentive to keep up with mortgage payments.

Amid mass layoffs and pay cuts, soaring unemployment is a bigger reason for missed mortgage payments than high interest rates, according to a study from the Federal Reserve Bank of Boston.

Still, the housing market may be picking up. Builder confidence in April made its most dramatic increase in almost seven years.
Worst-hit states

Five states accounted for nearly 60% of the total foreclosure activity in the first quarter: In California, Florida, Arizona, Nevada and Illinois, 479,516 properties received foreclosure filings.

California alone, with 230,915 filings in the first quarter, accounted for nearly 29% of the total. The number of foreclosure filings in the state increased 35% from the fourth quarter and 36% from the year-ago period.

In March, California had 107,785 total filings – a jump of 33% from February and almost 67% from a year ago.

The state is tied with Rhode Island for the fourth-highest unemployment rate, at 10.5%. Jobs are disappearing as the housing crisis drags down California’s economy.

Florida’s total filings in the first quarter fell 12% from the fourth quarter, but the state’s 119,220 were still the second-highest in the country.

Third was Arizona, with one filing for every 54 households, up almost 80% year-over-year and 6.2% from the fourth quarter.

Nevada was fourth in total filings, and first in completed foreclosures. Its foreclosure rate was more than five times the national average, and one in 27 houses received a filing.

Like California, Nevada employment has suffered as a result of the housing crisis. Nevada had a total of 41,296 filings, almost 111% over last March and 19% over the fourth quarter.

Bank repossessions in Nevada were down 3% from the fourth quarter, but defaults increased 27% and auction sale notices rose 35%.

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