August 03, 2007 ForeclosureS.com: August Report: 11 States have Triple Digit Increases Contact: Sofia Gutierrez   ForeclosureS.com   916-860-1190   Sofia@halldinpr.com SACRAMENTO – Mortgage defaults and foreclosures continue at an alarming rate nationwide, swallowing up home ownership dreams for tens of thousands more Americans every month. Both pre-foreclosure filings and homes lost to foreclosure the first seven months of this year are up on all counts (per capita basis and in sheer numbers), according to the latest statistics from California-based ForeclosureS.com, which has been tracking and analyzing foreclosure and property information for 20 years. “The numbers are dismal, but we had better get used to it because the blood-letting likely will continue for another 12 to 18 months,” 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). “It’s a tough reality, but many more over-extended homeowners not even in default yet, won’t be able to refinance because of tightened credit markets, and will eventually lose their homes to foreclosure,” adds McGee. The recent blowup at American Home Mortgage is a reminder that the mortgage markets are very panicked and illiquid right now. American Home customers generally had good credit histories -- an indication that the mortgage mess is no longer confined to risky subprime borrowers. Through the rest of this year and into next, a raft of adjustable-rate mortgages will begin adjusting to higher interest rates. The higher monthly payments may very well squeeze even borrowers with good credit histories, leading to a new round of mortgage defaults. On a per-capita basis for the first seven months of 2007, 9 pre-foreclosures were filed for every 1,000 households (567,046 total filings), up more than 27 percent from nearly 7 filings per 1,000 household. That’s also up more than 83 percent from the 4.9 filings per 1,000 households for the same period a year ago, reports ForeclosureS.com, based on analysis its nearly 3.5 million listings in more than 1,590 counties across the country. Pre-foreclosure filings indicate homeowners that are in default on their mortgages, facing potential foreclosure, and trying to work out their financial problems. It includes notice of default filings or notice of foreclosure auction filings. Here’s a month by month snapshot of how each *Region is doing year to date.Notice the 27% jump from June to July in new pre-foreclosure filings. Regional Preforeclosures Region Households January February March April May June July Totals Per Capita   Midwest 13,322,289 9,264 9,701 14,127 15,570 16,996 11,802 13,086 90,546 0.68 %   Southeast 16,359,083 16,445 19,128 26,326 21,532 27,620 19,931 27,511 158,493 0.97 %   Northeast 17,694,185 13,275 12,622 11,973 13,640 16,356 12,324 15,349 95,539 0.54 %   Southwest 26,174,730 31,280 32,284 42,826 34,843 45,158 33,785 43,276 263,452 1.01 %   Other States 2,403,078 1,011 1,074 1,819 1,527 1,326 1,176 1,199 9,132 0.38 %   Nationwide 75,953,365 71,275 74,809 97,071 87,112 107,456 79,018 100,421 617,162 0.81 %   Regions contain several states in a particular geographical location of the United States. Please http://www.foreclosures.com/stats/ and then Click a Region to display the states within. Thousands of additional homeowners already lost their properties to foreclosure so far this year, too. As measured by REO (real estate owned by a bank or lender) filings, year to date, 3.7 properties for every 1,000 households in the United States have been lost to foreclosure. That’s up 24 percent from per capita numbers during the first half of 2007 and represents a total 294,539 REO filings (filing numbers are up 18.8 percent from the first seven months of the year). Here’s a month by month snapshot of how each *Region is doing year to date. Notice the 24% jump from June to July in houses lost to foreclosure (REO). Regional REOs Region Households January February March April May June July Totals Per Capita   Midwest 15,862,818 11,170 9,253 13,571 11,821 14,728 12,487 13,089 86,119 0.54 %   Southeast 17,782,691 8,270 7,949 12,029 10,652 12,817 10,223 12,471 74,411 0.42 %   Northeast 17,563,990 1,242 1,127 2,461 2,405 1,955 2,058 2,600 13,848 0.08 %   Southwest 26,552,480 15,597 13,421 19,723 17,840 16,874 15,937 21,125 120,517 0.45 %   Other States 2,575,666 885 484 624 477 655 830 2,088 6,043 0.23 %   Nationwide 80,337,645 37,164 32,234 48,408 43,195 47,029 41,535 51,373 300,938 0.37 %   Regions contain several states in a particular geographical location of the United States. Please http://www.foreclosures.com/stats/ and then Click a Region to display the states within.  “The foreclosure outlook is not good, but it is not a cause for panic,” adds McGee. “In spite of the housing industry’s troubles, the nation’s economy, as measured by the 3.4 percent second-quarter growth in the U.S. gross domestic product (GDP), is going strong, and so is current consumer confidence in it.” What’s really happening in the market goes beyond subprime loans—those issued to people with little or no credit--gone bad and subsequent foreclosure fallout. “The big picture is that the formerly artificial, overzealous housing and loose credit markets have adjusted too firmly and a clampdown in liquidity is the result. Liquidity refers to the availability of money to lend for housing for everyone. For the past few years as home prices appreciated almost out of control, so did the artificial and ‘creative’ financing environment that helped people who couldn’t really afford it buy their homes. Now, thanks to Freddie Mac’s lead in tightening lending qualification standards earlier this year, lenders are being extremely cautious on all levels. Home loans and refinancings now are being made only if potential borrowers meet full documentation income qualifications necessary to afford those mortgages” says McGee. “We went from ‘irrational exuberance’ in the housing and credit markets to fear and blood on the streets very quickly. We need to get to a place where it’s a balanced financing environment again to help stabilize our housing markets.” “The foreclosures will work their way through. As they do in the coming months, we’ll see more and more REO properties and REO auctions (Please see REO Auction Update below),” add McGee. “What worries me more about the future is a lack of liquidity in the market for all borrowers in general. What’s happening now with subprime and now alt-a lenders collapsing, lenders exiting the subprime market, industry consolidations, bankruptcies, and more, is that the institutional investors that provide cash to lending markets are panicking and pulling their money out. With tighter credit, fewer people will be able to qualify for home loans. As a result, we can expect to see a drop in overall homeownership rates nationwide—currently at an all-time high of 69 percent. Many of those people who lose their homes to foreclosure won’t get back into homeownership until they raise their income years later to better afford it.” Let’s look closer at a few more July 2007 pre-foreclosure statistics from ForeclosureS.com: The Top 10 Counties nationwide for pre-foreclosures on a per capita basis July year to date (they’re actually 11 because of a three-way tie for last place) include: Alpine County, California (that state’s smallest county and in the Sierra Nevada): 39.3 filings per 1,000 households Lee County, Florida (which includes Cape Coral-Fort Myers area): 36.2 filings per 1,000 households Kendall County, Illinois (southwest of Chicago): 35.4 filings per 1,000 households Wasatch County, Utah (southeast of Salt Lake City): 34.4 filings per 1,000 Pinal County, Arizona (south of Phoenix): 33.3 filings per 1,000 Flagler County, Florida (north of Daytona Beach and including Palm Coast): 32.8 filings per 1,000 Valencia County, New Mexico (south of Albuquerque): 32.4 filings per 1,000 Clark County, Nevada (which includes Las Vegas): 32.2 filings per 1,000 Rockwall County, Texas (part of the Dallas-Fort Worth metroplex): 31.7 filings per 1,000 households Osceola County, Florida (south of Orlando and includes Kissimmee): 31.7 filings per 1,000 households Riverside County, California (which includes part of Greater Los Angeles): 31.7 filings per 1,000 households On strictly number of filings basis, seven of the above 10 counties showed triple digit increases in pre-foreclosure filings year to date 2007 vs. the same time a year ago. Kendall County, Illinois, for example, had 666 pre-foreclosure filings year to date, up 100 percent from the 333 the same time a year ago. It’s also the second fastest-growing county in the United States behind Flagler County, Florida (pre-foreclosure filings up 274 percent), and just ahead of Rockwall County, Texas, according to U.S. Census data. Pinal County, Arizona (Census ranks it as the sixth-fastest growing county) had a 180 percent increase in pre-foreclosure numbers. On the basis of pre-foreclosure filings per capita year-to-date, the top five states include Nevada (25.5 filings per 1,000 households; 19,044 actual filings), Florida (17.6 filings per 1,000 households; 111,020 actual filings), Colorado (14.5 filings per 1,000 households; 20,382 actual filings), Illinois (13.5 filings per 1,000 households; 52,696 actual filings), and New Jersey (12.2 filings per 1,000 households; 37,250 actual filings). California, perennial numbers leader in terms pre-foreclosure filings, comes in sixth on a per capita basis with 11.5 filings out of every 1,000 households in the state (132,101 actual filings). The nation’s Southeast Region took over first place from the Southwest with 11.7 pre-foreclosures per 1,000 households in the region year-to-date. Looking at July foreclosure numbers as measured by REO filings from ForeclosureS.com: States with the highest per capita numbers of properties lost to foreclosure year to date include Colorado in a tie with Michigan (9.4 foreclosures for every 1,000 households; 14,736 and 18,788 REO filings year to date respectively), Nevada (9.3 filings per 1,000 households), Georgia (8.5 filings per 1,000 households), and Indiana (7.8 filings for every 1,000 households). On a brighter note, however, in hard-hit-by-foreclosures Colorado a number of counties, including Adams, Arapahoe, and Denver, the number of REO filings actually was down year to date. The heavily industrialized and hard-hit by layoffs Midwest Region had the highest per capita incidence of foreclosure nationwide this year with 5.5 REO filings for every 1,000 households in the region. Michigan, Indiana, Ohio (6.7 filings per 1,000 households), and Missouri (6.6 filings for every 1,000 households) all were among the nation’s top 10 in terms of per capita REO filings year to date. The Northeast Region trails the rest of the nation in terms of REO filings per capita, with less than one filing for every 1,000 households. The Top 10 Counties nationwide for foreclosures on a per capita basis year to date include: Costilla County, Colorado (in rural southern Colorado): 253.5 REO filings per 1,000 households. Valencia County, New Mexico: 47.3 filings per 1,000 households. Elko County, Nevada (in the northeastern part of that state): 37.6 filings per 1,000 households). Mohave County, Arizona (in northwestern Arizona and includes Lake Havasu City and Kingman): 35.8 filings per 1,000 households. Hood County, Texas (part of Dallas-Fort Worth Metroplex): 32.3 filings per 1,000 households. Tangipahoa Parish, Louisiana (north of Lake Pontchartrain and bordering Mississippi): 31.3 filings per 1,000 households. Weld County, Colorado (north of Denver along Colorado’s Front Range): 28.4 filings per 1,000 households. Garland County, Arkansas (southwest of Little Rock): 26.3 filings per 1,000 households. Modoc County, California (heavily rural in northeastern California): 25.6 filings per 1,000 households. Elbert County, Colorado (east if Denver metropolitan area with an urban/rural mix): 21 filings per 1,000 households.   REO Auction Update: Buyers beware! REO auctions are a bonanza for banks, not buyers. Forget the hype and incessant promotion that buyers can snatch up tons of deals on foreclosed homes at these mega foreclosure property auctions popping up across the country. It has not proven true in 2007.  Instead, lenders and banks, their portfolios swollen with foreclosed properties, are raking in big bucks through these multiple-properties auctions that have become the latest real estate rage. In fact, at a three-day auction of Southern California properties in May by the Real Estate Disposition Corporation (REDC), an affiliate of LandAuction.com Inc., the company boasts that it sold “Over $100 Million Dollars at 95% of sellers’ BPOs!” BPO stands for broker price option, or the broker’s estimated selling price for a property. To put that in perspective, on average, most REO properties sold conventionally on the Multiple Listing Service (MLS) sell for only about 90 percent of their BPO price! You are much better off working the Pre-Foreclosure opportunities in your area, to find great deals. They are everywhere.   About ForeclosureS.com: Sacramento-based ForeclosureS.com, publisher of foreclosure property information for more than two decades, has more than 3.5 million listings of current foreclosure filings covering nearly 1,600 major U.S. counties. To ensure accuracy, ForeclosureS.com bases its foreclosure statistics on the numbers of formal notices filed against a property in the foreclosure process. 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. Media Contact: Sofia Gutierrez, ForeclosureS.com, 916-860-1190 or sofia@halldinpr.com