Foreclosures Continue To Rise, Adding to Inventory

Irvine, CA, June 13, 2008--The bad news continues to pile up in the housing market as foreclosures in May were up nearly 50 percent compared to a year ago and 7 percent over April, according to tracking firm RealtyTrac Inc.

Nationwide, 261,255 homes received at least one foreclosure-related filing in May, up 48 percent from 176,137 in the same month last year.

One in every 483 U.S. households received a foreclosure filing in May, the highest number since RealtyTrac started the report in 2005 and the second-straight monthly record.

Foreclosure filings were up from last year in all but 10 states. Nevada, California, Arizona, Florida and Michigan had the highest statewide foreclosure rates.

Metro areas in California and Florida accounted for nine of the top 10 areas with the highest rate of foreclosure. That list was led by Stockton, Calif. and the Cape Coral-Fort Myers area in Florida.

Nearly 74,000 properties were repossessed by lenders nationwide in May, while more than 58,000 received default notices, RealtyTrac said.

Rick Sharga, RealtyTrac's vice president of marketing, said foreclosures are unlikely to peak until sometime this fall, as more loans made to borrowers with poor credit records reset at higher levels. "I don't think we've seen the high point," he said.

Up to 60 percent of borrowers who receive foreclosure filings are likely to lose their homes, Sharga said. The rest are likely to be able to sell or refinance.

A government report on Wednesday found that among mortgages held by Bank of America, Citigroup Inc. and seven other large banks, foreclosures climbed to 1.23 percent of all loans in March from 0.9 percent in October.

As foreclosed properties pile up, they add to the inventory of homes on the market and drag down home prices.

Nationwide, one out of every four sales between January and March was a distressed sale.