Housing foreclosures down from peak
NEW YORK (Reuters) - U.S. home foreclosure filings decreased 8 percent in September from a 32-month peak in August, though they are still nearly double their year-ago levels, a report said on Thursday.
Foreclosure filings in September fell to 223,538, representing one in every 557 households, led by California, Florida and Ohio, according to RealtyTrac, an online market of foreclosure properties.
The level has climbed 99 percent from a year ago as the deepening housing slump hurt homeowners and investors with risky mortgages and left them unable to refinance to loans with easier terms.
Decreases in September were seen across 39 states, suggesting a broad retreat may be under way, RealtyTrac said. But housing forecasts are grim, and causes behind foreclosures such as rising payments on adjustable-rate mortgages are still being played out. Payments on some $650 billion in ARMs are slated to reset from the current quarter to the end of 2008, according to Lehman Brothers Holdings Inc.
"I would hesitate to say that the recent dip in foreclosures is good news because we know there are a lot of resets to occur, and we expect when those occur there will be more bad news," said Mike Schenk, senior economist for the Credit Union National Association in Madison, Wisconsin.
Buyers "snatching up" discounted foreclosure properties may have been responsible for the reduced filings, James Saccacio, RealtyTrac's chief executive officer, said in a statement.
Curbing foreclosures has become a priority of many mortgage companies, which under guidance of the U.S. Treasury on Wednesday formed a coalition to help hard-pressed homeowners. Mortgage servicers are being pushed to alter existing loans where possible to prevent foreclosure, which can be more costly for lenders and investors.
Foreclosure filings recorded by RealtyTrac include default notices, auction sales notices and bank repossessions.
Nevada, Florida and California posted the highest foreclosure rates even as their overall levels declined, the company said. Illinois was the only state among the top 10 in total filings that saw an increase in foreclosures in September versus August, it said.
The housing slump that began in late 2005 may last a longer-than-expected four to five years, in part because the boom was unusually long, the CUNA's Schenk said. U.S. home prices will keep falling, or rise slower than the pace of inflation, he said.
"That does not necessarily mean doom, but (housing activity) will be slow and that there will be wealth effects related to that," he said.
