Foreclosures.com - The Foreclosure Experts

SACRAMENTO– The foreclosure pox continues to spread unchecked across the country despite efforts by government and industry to stop it. 3 out of every 1,000 homeowners in the United States lost their homes to foreclosure in the first half of the year. That’s up 41 percent compared to the same period last year, according to the latest numbers from ForeclosureS.com, a California-based real estate investment advisory firm and longtime publisher of foreclosure and property information.

These per capita numbers translate to almost a quarter-million residential properties (247,907) that ended up in the hands of banks or lenders this year because homeowners couldn’t get their mortgage default problems solved, according to ForeclosureS.com, which tracks and analyzes foreclosure filing through its database of more than 3.2 million listings nationwide. Per capita reflects the number of filings as a percent of the number of households in an area.

“Hundreds of thousands of more homeowners won’t be able to escape foreclosure for most of the rest of the year either unless stagnating housing prices and markets pick up, and the nation’s economy rebounds, too,” says Alexis McGee, president of ForeclosureS.com and author of the upcoming book, “The Foreclosures.com Guide to Investing: Making Huge Profits Investing in Pre-Foreclosures Without Selling Your Soul” (John Wiley, September 2007).

“All the congressional, industry, and media talk about helping financially strapped homeowners work out their default woes has had little effect on the current foreclosure picture. Instead, foreclosure numbers keep rising; the effects of the sub-prime lender debacle have spilled over into other mortgage markets like Alt-A (those borrowers that aren’t prime, but have better than sub-prime credit histories); and some even analysts predict the increased tightening of lending practices may actually have a detrimental affect on homeownership overall.

Just like a pendulum, lending standards swung too far out “getting everyone into a mortgage, whether they could afford it or not” to “tightened lending standards that are preventing qualified buyers from homeownership”. At some point, the pendulum will need to rest in the middle, with lending standards easing from where they are now -- and the sooner the better” adds McGee.

The first six months pre-foreclosure filing numbers are also grim. These are the homeowners who have defaulted on their mortgages but haven’t yet lost their homes to foreclosure. Nationally, nearly 7 out of every 1,000 households (more than 507,000) were forced to deal with the threat of foreclosures year to date.

Every region of the country saw their numbers of pre-foreclosure filings increase in the second quarter over the first quarter 2007of the year, too.

“We base our foreclosure statistics on the formal notices filed against a property in the foreclosure process,” says McGee. “In some states that can mean up to three filings against one property—notice of default, notice of foreclosure auction, and notice of REO (after a property has gone to foreclosure auction and a bank or lender takes possession of a property). In other states, it’s only two filings—auction notice and REO notice.

If you simply count the foreclosure filings, the same property will be counted multiple times,which inaccurately skews the numbers,” says McGee. “To avoid that confusion we nowreport the type of filings broken down intojust two groups--pre-foreclosures (the initial notice that can be default OR auction, but not both) and REOs (after foreclosure, now lender owned).

This provides a clearer picture of the actual number of homeowners facing potential foreclosure, and trying to work out their financial problems—pre-foreclosures—from those homeowners that failed to solve their default problems, and lost their homes to foreclosure, and now REO (real estate owned by a bank or lender). Let’s take a closer look:

State	Filings	Per Capita
Nevada	15,812	2.12 %
Florida	90,145	1.42 %
Colorado	20,879	1.30 %
Illinois	46,934	1.20 %
New Jersey	31,372	1.02 %
California	104,597	0.91 %
Arizona	17,077	0.90 %
Utah	5,061	0.79 %
Texas	40,025	0.70 %
Georgia	16,962	0.66 %

Regional Preforeclosures
Region	Households	January	February	March	April	May	June	Totals	Per Capita
Midwest	13,322,289	9,103	9,552	14,076	15,349	16,945	12,216	77,241	0.58 %
Southeast	16,359,083	15,302	17,913	25,303	20,647	26,883	20,319	126,367	0.77 %
Northeast	17,357,043	13,269	12,616	11,971	13,635	16,342	12,385	80,218	0.46 %
Southwest	26,174,730	30,514	31,474	41,964	34,005	44,402	33,798	216,157	0.83 %
Other States	2,403,078	1,000	1,052	1,808	1,506	1,319	1,178	7,863	0.33 %
Nationwide	75,616,223	69,188	72,607	95,122	85,142	105,891	79,896	507,846	0.67 %

· The Southwest Region remains hardest hit by pre-foreclosure filings with just over 8 (8.3) pre-foreclosure filings for every 1,000 households. Nevada, with 21.2 filings per its 1,000 households, leads the region. Colorado takes the No. 2 spot in the region with 13 filings per 1,000. Followed by California with 9.1 filings per 1,000, and Arizona with 9.0 filings per 1,000.

· The Southeast Region takes second nationally pre-foreclosures with 7.8 filings per 1,000 households. Florida leads with 14.2 pre-foreclosure filings in the first six months of the year. Arkansas and Georgia both recorded more than 6 filings per 1,000 households.

· Some of the counties nationwide with the highest number of per capita pre-foreclosure filings so far this year include: Kendall, IL (32.1 per 1,000), Wasatch, UT (31.0 per 1,000), Valencia, NM (30.4 per 1,000), Lee, FL (29.1 per 1,000), Flagler, FL (27.7 per 1,000), Adams, CO (27.5 per 1,000), Clark, NV (26.9 per 1,000), Pinal, AZ (26.8 per 1,000), Osceola, FL (25.6 per 1,000), Riverside, CA (25.4 per 1,000).

State	Filings	Per Capita
Colorado	14,640	0.92 %
Michigan	16,968	0.81 %
Nevada	5,519	0.75 %
Georgia	14,644	0.71 %
Indiana	6,131	0.61 %
Ohio	23,301	0.57 %
Missouri	8,115	0.56 %
Texas	32,209	0.54 %
Alabama	3,725	0.49 %
Arkansas	2,330	0.45 %

Regional REOs
Region	Households	January	February	March	April	May	June	Totals	Per Capita
Midwest	15,838,278	11,121	9,199	13,546	11,795	14,688	12,502	72,851	0.46 %
Southeast	17,790,697	8,044	7,745	11,831	10,482	12,676	10,251	61,029	0.34 %
Northeast	17,563,990	1,231	1,120	2,459	2,402	1,947	2,067	11,226	0.06 %
Southwest	26,552,480	15,503	13,280	19,615	17,754	16,810	15,941	98,903	0.37 %
Other States	2,575,666	869	479	622	470	627	831	3,898	0.15 %
Nationwide	80,321,111	36,768	31,823	48,073	42,903	46,748	41,592	247,907	0.31 %

· Looking at REO’s (those people that actually lost their homes to foreclosure) Colorado has had 9.2 REO filings for every 1,000 households. But that’s down from the 23.8 filings per 1,000 households in the state for all of 2006.

· Michigan ranked second with 8.1 REO filings out of every 1,000 households. That’s down from the 11.5 filings per capita for every 1,000 households for all of 2006.

· Nevada ranked third with 7.5 filings for its every 1,000 households. That’s up slightly from the 7.2 filings per 1,000 for all of 2006.

· Other states with big numbers of homeowners per capita lost to REO foreclosure include: Georgia (7.1 filings per 1,000); Indiana (6.1 per 1,000); Ohio (5.7 filings per 1,000); Missouri (5.6 filings per 1,000) and Texas (5.4 filings per 1,000).

· Counties hard-hit nationwide by REOs so far this year include: Mohave, AZ (33.8 filings per 1,000); Hood, TX (30.4 filings per 1,000); Elko, NV (29.5 per 1,000); Weld, CO (28.2 per 1,000); Modoc, CA (23.3 per 1,000); Garland, AR (19.6 per 1,000); Park, CO (18.0 per 1,000 ); Elbert, CO (17.0 per 1,000); Adams, CO (16.6 per 1,000); Hardeman, TN (15.8 per 1,000).

“The REO filings also show that the Midwest Region continues to take the brunt of the foreclosure epidemic nationally in terms of properties actually lost to foreclosure so far this year—4.6 REO filings per 1,000 households,” says McGee. “That’s being fueled by a combination of manufacturing slowdowns, offshore outsourcing, and economic fallout from depressed markets and home prices.” The Midwest also led in REO filings per capita for all of 2006 (8.1 per 1,000 households).

So far in 2007, the Southwest ranks second with 3.7 REO filings per capita, with the Southeast trailing closely with 3.4 filings per its 1,000 households. The REO outlook, though, continues to brighten in the Northeast with less than one (0.6) REO filings year to date per 1,000 households.

With this surge in foreclosures, the use of REO auctions is growing, too. That’s when a lender, bank, or group of property holders contracts with a private auction company to sell their REO properties in a large scale event. “It’s a great thing for the lenders, as these auction companies are filling the room with a ton ofbuyers and selling their properties for top dollar in one weekend” says McGee.“However, that is not good news for the buyers at these auctions. Too many potential homeowners and investors are misled into thinking they’re going to get a great deal at auction” says McGee.

“That’s not necessarily the case. In fact, the reality instead is that often if it’s a big well-publicized auction—as in the case of the 400-plus property auctions that draw 4,000 bidders--buyers end up paying as much (if not more) for a property than what is currently listed for sale in their MLS. That’s what’s been happening with most properties at big auction events earlier this year. It’s a function of supply and demand. You get 10 people bidding on a house, and watch the prices skyrocket.” (To find out more about the ins and outs of foreclosure auctions, visit ForeclosureS.com/blog)

For access to our foreclosure filing statistics (pre-foreclosure and REO filings) by region, state, and county, including year-to-date; month-to-month; quarter-over-quarter comparisons please visit: http://www.ForeclosureS.com/www/pages/pressinquiry.asp.

About ForeclosureS.com: Finally there’s a solid information source that provides an accurate picture of exactly what’s happening in the nation’s housing and foreclosure markets. Sacramento-basedForeclosureS.com, publisher of foreclosure property information for more than 20 years, has more than 3.2 million listings of current foreclosure filings covering more than 1,500 major U.S. counties. Get the details for your market area by visiting http://www.foreclosures.com/www/pages/pressinquiry.asp.

ForeclosureS.com: 3 Out of 1000 Owners Have Lost Their Homes This Year