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A new report shows a one-month improvement, but as more adjustable mortgages reset in 2008, expect the rate to worsen
A surprising new report suggests that U.S. home foreclosures actually declined 10% in November despite signs that the housing slowdown is worsening in much of the nation.
In November, there were 201,950 foreclosure filings—default notices, auction sale notices, and bank repossessions—down 10% from October, the first double-digit monthly decrease since April, 2006, Irvine (Calif.)-based RealtyTrac said Dec. 19. But the foreclosures are up nearly 68% from November, 2006. The U.S. foreclosure rate is about one filing for every 617 households.
"This could indicate that foreclosure activity has topped out for the year," RealtyTrac Chief Executive Officer James Saccacio said in a prepared statement. But "the true test of whether this ceiling will hold will come at the beginning of next year when we anticipate that a seasonal surge in foreclosure filings and another possible wave of resetting mortgages could place further pressure on the housing market."
No Change at the Top
Nevada laid claim to the nation's highest foreclosure rate for the 11th month in a row, according to the report. The Nevada rate of one filing for every 152 households was more than four times the national average. Florida, with a rate of one filing for every 282 households, ranked second, while Ohio was third.
California, which had 39,992 filings, more than any other state, saw a 21% decrease in foreclosures from the previous month. California's rate was still up 100% from November, 2006. California cities accounted for five of the top 10 metro foreclosure rates in November. Stockton, Calif., had the highest rate—one foreclosure filing for every 104 households.
A Holiday Reprieve
Glen Daniels, director of REO (real estate owned properties) for Foreclosure.com, a data provider of preforeclosure and foreclosure properties, and a competitor of RealtyTrac, says it's unlikely that the nation's foreclosure problems are improving.
Foreclosures might have dropped, in part, because of the holiday season.
"Most lenders are less aggressive at this point for the holidays," he says. "And each lender is dependent on an attorney to do the filing for them. And of course, this is the time of year people are taking vacation."
Daniels adds that many variable-rate mortgages secured during the boom will adjust next year.
"It's going to get worse before it gets better," he says.