March Home Foreclosures Up 47 Percent Year-on-Year

MoneyNews
Wednesday, April 18, 2007

NEW YORK -- U.S. home foreclosures rose 7 percent in March from February to 149,150, reflecting the struggle of subprime borrowers to keep their homes, real estate data firm RealtyTrac said Wednesday.

The figure, which comprises default notices, auction sale notices and bank repossessions, was 47 percent higher than a year ago, the Irvine, California-based company said.

Nevada posted the highest foreclosure rates of the 50 U.S. states for a third straight month, with Las Vegas posting the second-highest foreclosure rate among cities monitored by RealtyTrac.

Nevada reported 4,738 foreclosure filings, more than triple the number in March 2006. Its foreclosure rate showed 1 filing for every 183 households, more than four times the national rate of 1 per 775 households, according to RealtyTrac.

Default rates in the subprime segment of the U.S. mortgage market have jumped in recent months as the housing industry has slowed and prices have fallen.

At least 20 lenders in the subprime mortgage sector, which serves borrowers with poor credit histories at high interest rates, have gone out of business as a result.

The crisis has triggered broader concerns that the fallout may spread to mainstream lenders and damage the economy.

"While foreclosures are causing a major disruption in the subprime sector of the lending industry and saturating pockets of some local markets, it's important to note that U.S. foreclosure activity overall is not far above historical norms," James Saccacio, RealtyTrac's chief executive officer, said in a statement.

It is unclear whether the surge in foreclosures in the first quarter would continue. Last year, a spike in foreclosures in the first quarter leveled off through the second and third quarters, the company said.

"However, if that pattern does not repeat itself, and foreclosure activity continues to accelerate, we may see more widespread consequences," Saccacio said.

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