NEW YORK More than 1 percent of all households faced foreclosure during 2007, almost twice the previous year's rate, a real estate marketing company said on Tuesday.
The total number of foreclosure filings rose 75 percent last year to 2,203,295, with rates highest in Nevada, Florida and Michigan, according to RealtyTrac. Filings rose at the end of the year, with December marking the fifth straight month of more than 200,000 foreclosures reported, it said.
Foreclosures have soared as falling U.S. home prices have exposed underwriting standards weakened during the housing boom to boost volume. Billions of dollars in losses at lenders and Wall Street banks have resulted in lenders putting money out of reach for many borrowers who had depended on getting new loans or refinancing an adjustable mortgage before higher monthly payments kicked in.
Lower appraisals on homes have also prevented borrowers from refinancing into loans with easier terms.
"Some properties may have just entered the initial stage of foreclosure in 2007 and could be going through the rest of the foreclosure process in 2008 unless lender and government intervention efforts" gain traction, James Saccacio, RealtyTrac chief executive officer, said in a statement.
Mortgage companies and counselors, encouraged by the U.S. Treasury, are engaged in an initiative to increase the number of loans modified to easier terms. The Hope Now group is also trying to rework payment plans on existing loans.
Hope Now this month said it helped 370,000 strapped borrowers avert foreclosure last year.
Nevada's foreclosure rate led the nation, with 3.4 percent -- more than three times the national average -- of households entering the process, RealtyTrac said. It had the highest foreclosure rate during every month in 2007.
Florida and Michigan had the second- and third-highest foreclosure rates, at 2 percent and 1.9 percent, respectively.
Others among the top 10 states for foreclosure rates in 2007 were California, Colorado, Ohio, Georgia, Arizona, Illinois and Indiana. All seven states documented more than 1 percent of homes entering the process, RealtyTrac said.
In 2006, 0.58 percent of U.S. households were in some stage of foreclosure, it said.
(Reporting by Al Yoon; Editing by Dan Grebler)