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Published Saturday, September 27, 2008 in Local

Foreclosure hike dips in past 2 months

By Jeff Bishop

The Times-Herald

Foreclosure filings in August in Coweta County increased 22 percent compared to the same month a year ago, which was a significantly slower pace than in previous months, and slower than the national pace.

But that slowing trend appears to have reversed itself in September, which saw local foreclosures rocket back up to 62 percent over the previous year.

Still, even the September rate of increase is down from the high in July, which saw the number of foreclosures advertised in The Times-Herald increase by a whopping 94 percent from the same month the previous year.

Nationally, foreclosure filings in August increased by 27 percent, but the national numbers are not yet available for September.

The rates of increase in foreclosures in Coweta County, when compared to the same months a year ago, range from a low of 22 percent in August to the July high of 94 percent.

Here's a month-by-month breakdown:

* Jan. 2008 -- 156 (up from 94 in 2007, or 65 percent).

* Feb. 2008 -- 123 (up from 94 in 2007, or 30 percent).

* March 2008 -- 128 (up from 87 in 2007, or 47 percent).

* April 2008 -- 145 (up from 91 in 2007, or 59 percent).

* May 2008 -- 128 (up from 71 in 2007, or 80 percent).

* June 2008 -- 125 (up from 79 in 2007, or 58 percent).

* July 2008 -- 136 (up from 70 in 2007, or 94 percent).

* Aug. 2008 -- 137 (up from 112 in 2007, or 22 percent).

* Sept. 2008 -- 177 (up from 109 in 2007, or 62 percent).

Nationwide, 303,800 homes received at least one foreclosure-related notice in August, up 12 percent from July, RealtyTrac Inc. said. That means one in every 416 U.S. households received a foreclosure filing during August.

Georgia remained the sixth-worst state for foreclosures in August, but its foreclosures were down 11 percent, according to the RealtyTrac report.

Georgia tallied 8,755 foreclosure filings -- default notices, auction sale notices and bank repossessions -- in August. This marked a 13 percent improvement over July 2008 and an 11 percent improvement over August 2007. The state's rate of foreclosures was 1 for every 442 households.

In Coweta County, the number of foreclosures remained steady from July to August, increasing by less than 1 percent, with a difference of only one foreclosure. However, from August to September, the number of foreclosures increased by 29 percent.

Nationally, August's increase was smaller than the two prior months. June and July both had year-over-year increases in foreclosure filings of 50 percent or more. Locally, the same pattern held true.

Still, the total number of foreclosure filings is the highest since RealtyTrac began issuing its report in January 2005, and the number of Coweta County foreclosures hit an all-time high this month.

Irvine, Calif.-based RealtyTrac monitors default notices, auction sale notices and bank repossessions. More than 90,893 properties were repossessed by lenders nationwide last month -- up more than half from 43,141 in August 2007, the company said.

According to The Associated Press, the top three states in foreclosure rates were Nevada, California and Arizona, in that order, RealtyTrac said. Florida, Michigan, Georgia, Ohio, Colorado, Illinois and Indiana rounded out the top 10, though Michigan, Georgia, Ohio and Colorado all reported rate decreases year-over-year.

"In August the total number of U.S. properties that received foreclosure filings as well as the national foreclosure rate were both the highest we've seen in any month since we began issuing our report in January 2005," said James J. Saccacio, CEO of RealtyTrac. "However, the annual increase of 27 percent was actually substantially lower than in previous months this year, when it was hovering around 50 to 65 percent. The lower annual percentage increase this month is due to a big spike in activity last August -- particularly in default activity."

Saccacio noted that in recent months annual increases in default activity and auction activity moderated. In August, default activity rose just 10 percent from 2007 and auction activity went up 7 percent.

"The increases in default and auction activity could be slowing down partly as the result of new legislation passed in several states that is designed to give homeowners in distress more time before foreclosure proceedings are initiated," Saccacio said. "In addition, some lenders are adopting loan servicing guidelines that encourage more proactive approaches to helping homeowners avoid foreclosure. The question now is whether these measures will actually reduce foreclosures or simply cause a temporary lull in foreclosure activity."

Weak sales, sinking home values, tighter home loan lending practices and a slowing U.S. economy hamstrung by high fuel prices have left some homeowners with few options to avoid foreclosure. Many can't find buyers or owe more than their home is worth and can't refinance into an affordable loan.

Banks and mortgage investors are also holding a glut of foreclosed properties and are slashing prices to get them off the books. The proposed $700 billion U.S. government "bailout" should help to relieve some of that pressure.

An estimated 2.8 million U.S. households will face foreclosure, turn over their homes to their lender or sell the properties for less than their mortgage's value by the end of next year, predicts Moody's Economy.com.

The next six months will be critical in terms of the housing crisis, noted Albert Saiz, assistant real estate professor at Wharton School of Business. Consumers and investors will be tracking volatile financial markets, judging the success or failure of this year's housing bill, monitoring the government bailout of Freddie and Fannie, and anticipating the impact of a new president, he said.

On the bright side, if home prices and sales stabilize or improve, the foreclosure situation could get better.

But the slow economy, high unemployment and volatile financial markets present obstacles to improvement in the foreclosure situation, Saiz said.

Together, California, Florida and Arizona accounted for more than half of the nation's volume of foreclosure activity.

Last month, California's foreclosure activity increased more than 40 percent from July and more than 75 percent from August 2007.

The California cities of Stockton, Merced and Modesto were 1-2-3 in top metro foreclosure rates. July's leader, the Cape Coral-Fort Myers, Fla., metro area, dropped to sixth. Las Vegas came in seventh.