Foreclosure filings nearly double

[Saguaro]

LOS ANGELES - Foreclosure filings across the U.S. nearly doubled last month compared with September 2006, as financially strapped homeowners already behind on mortgage payments defaulted on their loans or came closer to losing their homes to foreclosure, a real estate information company said Thursday.

A total of 223,538 foreclosure filings were reported in September, up from 112,210 in the same month a year ago, according to Irvine-based RealtyTrac Inc.

The number of filings in September was down 8 percent from August's 243,947, the firm said.

Despite the sequential decline, the September figure represents the second-highest total for filings in a single month since the company began tracking monthly filings two years ago.

"August was an extraordinarily high month for foreclosure activity, so some falloff was almost predictable," said Rick Sharga, RealtyTrac's vice president for marketing.

The filings include default notices, auction sale notices and bank repossessions. Some properties might have received more than one notice if the owners have multiple mortgages.

Typically, borrowers must be 60 to 90 days past due on their mortgage payments before their lender will consider them in default, the first stage of the foreclosure process. If a homeowner can't find a way to get current on payments, the home is then often put up for auction, and if it doesn't sell, it eventually goes back to the bank.

In all, 39 states saw a decline in foreclosure filings, the firm said.

Sharga noted that there was a spike in the number of bank repossessions in August that did not occur in September.

It's likely that the sequential decline in foreclosure activity between August and September was just a blip, not a bellwether of lessening foreclosure filings.

"We don't see September as the beginning of the end in this cycle of foreclosures," Sharga said.

The foreclosure rate for the nation in September was one foreclosure filing for every 557 households, the firm said.

The U.S. housing market has seen sales decline and home prices fall or remain flat, making it harder for homeowners who can't afford to make mortgage payments to sell their homes or seek refinancing.

Many of those troubled homeowners were among those who took on adjustable-rate mortgages that are now adjusting to a higher interest rate, translating into payments they cannot afford to make.

The rising delinquencies and foreclosures this year have led the mortgage industry to tighten lending standards, further narrowing options for homeowners struggling to pay their mortgage.

Nevada, Florida and California had the highest foreclosure rates in the country last month, the firm said.

Nevada reported one foreclosure filing for every 185 households, earning the state the highest foreclosure rate in the nation for the ninth month in a row. The state had 5,504 filings in September, down 11.1 percent from August and more than triple from September 2006.

Florida had one foreclosure filing for every 248 households. The state reported 33,354 foreclosure filings in September, down just less than 2 percent from August, but more than three times greater than September 2006's total.

California's foreclosure rate was one filing for every 253 households. The state reported the most foreclosure filings of any single state with 51,259, down 11 percent from August but a fourfold increase from September of last year.

Rounding out the states with the top 10 foreclosure rates last month were Michigan, Arizona, Georgia, Ohio, Colorado, Texas and Indiana.

http://news.yahoo.com/s/ap/20071011/ap_on_bi_ge/foreclosure_rates

[Partyless]

how many of these foreclosures were due to predatory/sub prime lending to people who couldn't afford homes otherwise? How many of these were due to funky creative interest only or ARM mortgages so people could get into or get more home than they could honestly afford? And how many were just hard luck financial crisis stories - job loss, medical bills, etc?

I think those are the statistics that bear scrutiny. First up - the scum of the earth predatory lendors selling out the American Dream to uneducated/financially ignorant people. Yes, most people want a home of their own but as Dave Ramsey (www.daveramsey.com (http://www.daveramsey.com)) says, unless you can AFFORD the home, it's not a blessing but a burden. Too many people want the 'dream' without knowing the facts that can make it a nightmare.

Second - stupid people who monkey with mortgage options to get a bigger home. These are the morons in my area who buy those brand new $900K+ homes with interest only/ARM loans that practically ensure foreclosure within 18-24 months. There are no less than seven foreclosure listings within one mile of my house right this second. Idiots who moved down to GA thinking they could get so much more house for their money and over extending or getting wooed by these McMansions on postage stamp lots. Sorry about your loss, there scout, but if you don't KNOW what you can afford, you're too dumb to be a homeowner!

Finally, the hard luck cases. I have much more empathy and sympathy for these folks. Statistics show that upwards of 70% of Americans are one missed paycheck or one major medical situation away from financial ruin. But here's the thing - foreclosure isnt an instant thing - in most states it takes anywhere from 8-10 months of missed payments to even start foreclosure procedings and even after that, the homeowner can work with the lender to agree to a short sale - to prevent the foreclosure. I know of one family locally who had this kind of situation and they sold at short sale rather than totally ding their credit with a foreclosure. They said the lender was very reasonable to work with even allowing them to stay in the home until they could find a rental.

Life happens - but sometimes people and their dumb decisions to take on more debt than they can handle and repay back are more about their actions than life just 'happening' to them.

I live in one of the top 10 states. It's ridiculous that the builders and developers here keep putting up these huge overly expensive homes. Most of them aren't selling now anyway so it's irresponsible for them to keep building just because they can. What IS the mortgage on a $900K house anyway?????

Final thought -I'm going through the Dave Ramsey course - Financial Peace - and it's eye opening how we are programmed and marketed to by financial institutions, credit card companies, and mortgage companies to think debt is perfectly normal and acceptable. The thing that burns me up now is that stupid VISA commercial that practically ridicules people who use cash or write checks as slow and not trendy. Yeah- flash that plastic and pay for the food court meal for the next 36 months! STUPID!!!!!

[The Q]

I'm going to go with partyless on this.

99% of the problem here is pure greed---buy the buyers and the lenders.

ADQ

[Saguaro]

It is the misuse of credit that gets people in trouble.If you can't pay off the bill when it is due,don't charge it.

[Partyless]

It is the misuse of credit that gets people in trouble.If you can't pay off the bill when it is due,don't charge it.

The problem with debt and money management is mostly behavioral. It's a proven fact that people with every intention of paying off a bill each month, don't do it and carry a balance. Problems come when they get comfortable with those minimum payments and because they are deemed a 'good credit risk' they get more and more cards. Human nature (instant gratification and the desire for stuff, etc.) and the next thing you know, someone has multiple cards carrying thousands of dollars in balances to the tune of 12-28% interest.

Intersting factoid - we are among the first generations who don't think debt is a bad thing. Our great grandparents thought debt was a sin; our grandparents had little to no debt - maybe a mortgage; our parents had a little more but nothing like what we have taken on. Today, the average person thinks nothing of carrying a mortgage, two or more car notes, several thousand dollars in consumer credit card debt and in some cases home equity lines so they can buy more stuff if the cards max out. One job loss or major medical incident can wipe out that fairy tale pretty quickly.

I read an interesting statistic - the average married couple spends the first five years of their marriage accumulating or trying to accumulate everything their parents did in decades of marriage. My parents first home was less than my father's first salary - and compare that to home prices and salaries today - no wonder we're in it up to our eyeballs.

Do lenders and developers have a role in this - absolutely. But ultimately it is the personal responsibility of the consumer not to spend more money than they have as disposable income. In other words - CASH. Screw VISA and that stupid commercial - I'm paying cash now!!!

[Saguaro]

I get interest on the checking account,I use my credit card and only have to withdaw from the checking account once a month. I get interest on the money I wouldn't have gotten,had I used checks

[Partyless]

I get interest on the checking account,I use my credit card and only have to withdaw from the checking account once a month. I get interest on the money I wouldn't have gotten,had I used checks

And that's a compliment. Dave Ramsey says Debt is Normal - be WEIRD!!! I'm shooting for full blown weirddom soon. I'm married to a spender with a chunk o credit card debt. Once we pay that off, we're golden!

If you've ever listened to his radio show, you'd be floored at what people cal lin with - $79K in consumer debt on a $40K income??? Most of the time people buy way too much car for their income - one person owed almost $40K on a car and their annual income was only around $32 - who the hell approves a loan like that?

So yeah, you're the exception in this equation. My parents use a VISA for everything and pay it off monthly as does a friend of mine. I use AMEX a lot and since you HAVE to pay that off, we're OK. But it's totally liberating in a way to start using cash only. I swear you spend less, too! It's way too easy to write a check or swipe the debit card and go a wee bit over what you'd budgeted. When you walk into a grocery store with $100 cash, you only spend that or less.

[AYFR]

Buy what you can afford and there will most likely not be this problem, live beyond your mean ans voilia you have a problem.
Just because the Joneses can afford it doesn't mean you canand even if you can ask yourself first "Do I really need it?"

[April15]

The message of the credit and bank card business's are hard to ignore for many people who are hoping for a upturn in their economic standing. They hear all the BS about the economy being great but don't realize that is only for a select group of the well to do or older people who rode the 90's boom to financial freedom.

[AYFR]

Not true, I am doing just fine and I am not "well-to-do OR old"

So there goes that theory.

[AYFR]

I must add that I am doing well BECAUSE I live within my means, don't have or want a credit card either and buy my vehicles used.

[April15]

Not true, I am doing just fine and I am not "well-to-do OR old"

So there goes that theory.Every rule has an exception!

[April15]

I must add that I am doing well BECAUSE I live within my means, don't have or want a credit card either and buy my vehicles used.I only know of a couple of families that have the means to be doing OK let alone well. I have only bought one new vehicle in my life and it is paid for.

[Partyless]

The message of the credit and bank card business's are hard to ignore for many people who are hoping for a upturn in their economic standing. They hear all the BS about the economy being great but don't realize that is only for a select group of the well to do or older people who rode the 90's boom to financial freedom.

Are you insinuating that because people HEAR the economy as a whole is going well, that's the rationale they use to live beyond their means in order to keep up? Or that the marketing credit card and banks are doing is so effective and hard to resist that people are snatching up credit cards and charging them up?

Sorry - not buying that at all.

And it's not the 90's boom that leads people to financial freedom. It's personal responsibility to budget so they live withing their means; to save money for emergencies so they don't rely on credit everytime Murphy comes to visit; and to invest for their retirement and child(ren)'s college so they don't have to rely on the government to get them through.

Simple as - don't spend more than you make; don't buy what you can't afford; and buy using the cash you have not OPM.