| NEW YORK
NEW YORK Oct 28 U.S. mortgage defaults ebbed
in some hard-hit cities in the third quarter, but unemployment
created new trouble spots as foreclosures set a record in the
quarter, real estate data company RealtyTrac said on
Foreclosure activity declined in five of the top 10 metro
areas from a year earlier, at least temporarily aided by
government programs to modify terms of home loans.
Job loss as well and mortgage rate resets, however, are
severely curbing the ability of homeowners to make timely
payments. Many metro areas with the 50 highest foreclosure
rates had sharp increases in filings during the past three
"Rising unemployment and a new variety of mortgage resets
continue to gradually shift the nation's foreclosure epicenters
in the third quarter away from the hot spots of the last two
years and toward some metro areas that had avoided the brunt of
the first foreclosure wave," James J. Saccacio, RealtyTrac's
chief executive, said in the company's quarterly Metropolitan
Foreclosure Market Report.
U.S. unemployment reached a 26-year high of 9.8 percent in
Foreclosure filings -- which include notice of default,
auctions and bank repossessions -- rose 5 percent in the third
quarter from the prior quarter and 23 percent from a year ago,
RealtyTrac reported earlier this month.
One in every 136 households with a loan got a filing in the
quarter, a record since the firm started tracking them in the
first quarter of 2005. Filings were reported on more than
937,000 properties in July through September.
All of the cities with the 10 highest foreclosure rates
were in California, Florida and Nevada, led by Las Vegas,
Nevada; Merced, California; and Cape Coral-Fort Myers,
Las Vegas had a third-quarter foreclosure activity rate of
5.13 percent, affecting one in 20 households with loans.
Five of the top 10 metro areas, including Merced and Cape
Coral-Fort Myers, reported a decrease in foreclosure activity
in the quarter from a year ago.
The other big metro areas that saw a decline in foreclosure
activity were all in California: Stockton, Modesto, and
Despite a 13 percent drop in foreclosure activity from the
second quarter and 11 percent drop from a year ago, Merced had
the second highest rate. The Cape Coral-Fort Myers metro area
ranked third in foreclosure activity, RealtyTrac reported.
And some cities that haven't been a focal point of the
foreclosure crisis showed steep increases in activity in the
Boise City-Nampa, Idaho, and Provo-Orem and Salt Lake City
in Utah had the biggest year-over-year increases in foreclosure
rates among the top 50 areas.
In California, the Chico area posted the biggest
year-over-year increase in foreclosure activity, up 98 percent
from the third quarter of 2008. Chico, located about 100 miles
north of Sacramento, had a 12.8 percent unemployment rate in
August, above the state and national averages, RealtyTrac
"As unemployment is likely to stay high and maybe even go a
little higher for a while, it means we will continue to see
people defaulting and their homes ending up in foreclosure,"
Jed Kolko, associate director of research at Public Policy
Institute of California in San Francisco, said on Tuesday.
The two other looming uncertainties are the fallout from
the next wave of adjustable-rate mortgage resets and the degree
of success of U.S. loan modification programs, he said, noting
the possibility that the government program may have only
delayed defaults and foreclosures.
(Editing by Leslie Adler)