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Ah, August. A big month for vacations, backyard barbeques, pool parties— and giving your house back to the bank. According to the guys at RealtyTrac, August 2007 had the highest number of foreclosure filings in a single month since the company began tracking foreclosures in January 2005—a total of 243,947, to be exact. This is up 36% from July and 115% from August 2006. In the U.S., there was one foreclosure filing (default notice, auction sale notice or bank repossession) for every 510 households last month.
“The jump in foreclosure filings this month might be the beginning of the next wave of increased foreclosure activity, as a large number of subprime adjustable rate loans are beginning to reset now,” said James J. Saccacio, chief executive officer of RealtyTrac. “Another significant factor in the increased level of foreclosure activity is that the number of REO filings (bank repossessions) is increasing dramatically, which means that a greater percentage of homes entering foreclosure are going back to the banks.”
Foreclosures are still most common in Nevada, California and Florida. If you live here, chances are you’ve seen a few signs in your neighborhood. Hopefully, you haven’t had one put up on your own home.
Will borrowers get any relief? We’ll see today when the Fed decides what to do about interest rates.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.