IRVINE, Calif. – Foreclosures continued to grow in the first quarter as adjustable-rate mortgages re-set at higher levels and home-price declines continued. California-based RealtyTrac Inc. reported that U.S. foreclosure filings more than doubled in the January through March period, with almost 650,000 properties, or one in every 194 households, in some stage of foreclosure, according to Bloomberg News.
Rhode Island saw a more than six-fold increase in filings compared with the first quarter of 2007, as well as an increase of 179.3 percent compared with the 2007 fourth quarter, making it 19th worst state in the country. But its rate of one household with a filing out of every 284 was still better than the national average, as well as Massachusetts – one of every 166 households, or No. 9 – and Connecticut – one of every 188, or No. 10 – according to RealtyTrac.
At the same time, the Providence/New Bedford metro area ranked 62nd of the Top 100 metro areas in the country, as one in every 284 homes showed a foreclosure filing. Worcester ranked 26th, with a foreclosure filing rate of one in every 125, while the Boston/Quincy metro area ranked 36th, with a one in 157 filing rate.
“This country needs a cleansing,” billionaire real estate investor Sam Zell, chairman of Equity Group Investments LLC, said yesterday at the Milken Institute Global Conference in Los Angeles. “We need to clean out all those people who never should have bought in the first place, and not give them sympathy.”
A surge in defaults among subprime borrowers spurred the collapse of the U.S. home loan market last year and caused more than $300 billion in writedowns and losses at banks and securities firms around the globe. More than 100 mortgage companies have stopped lending, closed, or sold themselves.
About $460 billion of adjustable-rate loans are scheduled to reset this year, according to New York-based analysts at Citigroup Inc.
At the same time, home prices in 20 U.S. metropolitan areas fell 10.7 percent in January from a year earlier, the most on record, registering a decline for the 13th consecutive month, according to the S&P/Case-Shiller home-price index. A record 18.6 million homes stood empty in the first quarter, the U.S. Census Bureau said yesterday.
Government attempts to slow the flood of defaults “could be simply deferring another flood of foreclosures,” RealtyTrac CEO James Saccacio said in a statement. “That could extend the length of time it takes the market to recover from this downward cycle.”
RealtyTrac Inc., based in Irvine, Calif., is a publisher of data and advice for real estate markets nationwide. To learn more, visit www.RealtyTrac.com.
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