Real Estate & Property Law
Mortgage Foreclosures Rise 58 Percent
Posted Jul 31, 2007 10:30 AM CDT
By Martha Neil
Mortgage foreclosures nationwide were up by 58 percent during the first half of 2007, compared to the first half of 2006.
That translates to a total of 573,397 homes at some point in the foreclosure process between January and June 2007, from a notice of default to repossession, reports the Associated Press. In a more preliminary sign of trouble, he number of foreclosure notices sent during that period was 925,986. The highest percentage of foreclosures is occurring among owners in California, followed by Florida, according to RealtyTrac data.
"We could easily surpass 2 million foreclosure filings by the end of the year, which would represent a year-over-year increase of over 65 percent," says James J. Saccaciom, RealtyTrac's chief executive officer.
Foreclosures reportedly soared by 800 percent in California in the second quarter of 2007, compared to 2006, according to data from a different tracking company, as previously discussed by ABAJournal.com. And they tripled in several South Florida counties near Miami during the first half of 2007, compared to the same period last year, AP says. Overall, Florida foreclosures are up 77 percent compared to last year.
Ohio and Texas also had very high numbers of foreclosures, and Arizona was among the top 10 states with foreclosure spikes, according to another version of the AP article.
Adjustable-rate mortgages which offer artificially low initial payments, and may also permit payments that do not even cover the monthly interest on the loan, are a major reason why homeowners are now experiencing sticker shock as payments skyrocket to cover the actual cost of the loan at a higher interest rate, according to Martin Hymowitz. He is chief executive of Mortgage Wholesalers of Florida, a subprime lender based in Plantation that he says offers only fixed-rate mortgages.
One owner who is struggling but isn't yet in foreclosure is Rene Asor, a resident of Key West. When his mortgage reset a few months ago, the payment shot up from $2,400 to $3,799. After falling behind, he caught up again but doesn't think he can stay on top of the payments for long.
Back when property values were rising, homeowners refinanced to get out of trouble like this. But now, especially with damaged credit due to his late payments, Asor doesn't see that as an option. ''I'm going to go into foreclosure,'' Asor he says. "Even to do a refinance it costs more money, the closing and all that.''