US home foreclosures double
Pastor Dale Morgan
US home foreclosures double*
From correspondents in Washington
November 02, 2007 07:56am
Article from: Agence France-Presse
BANKS and mortgage firms filed foreclosure notices against 446,726
American homes during the third quarter, almost double the number lodged
a year earlier, according to an industry report.
RealtyTrac, a California-based company which monitors the property
market, said foreclosure notices had rocketed 30 per cent during the
quarter from the prior quarter.
"August and September were the two highest monthly foreclosure filing
totals we've seen since we began issuing our report in January 2005,"
said James Saccacio, RealtyTrac's chief executive.
The property market has been in a slump since early 2006 and
foreclosures have surged in the past year as hundreds of thousands of
Americans have struggled to pay their mortgages.
The problem has been especially acute for people who took out subprime
mortgages, loans marketed to individuals with poor credit histories,
during the years-long property boom which petered out early last year.
Many subprime home loans were sold with low "teaser" interest rates
which have started to reset to higher rates. Economists say rate resets
will continue into next year, triggering even more foreclosures and
repossessions.
Treasury Secretary Henry Paulson said last month there are likely to be
over one million foreclosures this year, more than half of which will
probably stem from subprime loans.
"The rise in foreclosures is quite widespread. Given the number of loans
due to reset through the middle of 2008, and the continuing weakness in
home sales, we would expect foreclosure activity to remain high and even
increase over the next year in many markets," Saccacio warned.
RealtyTrac said the volume of foreclosures sweeping the property market
had risen nearly 100 percent compared with the third quarter of 2006.
The pace is equal to one of every 196 US homes, according to
RealtyTrac's survey.
The worst hit state is Nevada which posted the nation's highest
foreclosure rate during July-September, with one foreclosure filing for
every 61 households.
RealtyTrac issued its report a day after the Federal Reserve cut US
interest rates for the second time in as many months, partly to help
shore up the ailing property market.
The central bank cut its base interest rate to 4.50 per cent, saying
economic momentum would likely slow in coming months. Some analysts fear
the woes plaguing the property market could derail the wider economy.
The rate cut, the Fed's second in as many months, offers a lifeline to
cash-strapped consumers by lowering borrowing costs.
Big mortgage companies such as Countrywide Financial are meanwhile
racing to renegotiate tens of thousands of home loans in a bid to avert
foreclosures