Foreclosures Up Sharply, Worst Still to Come

Irvine, CA, April 15, 2008--Foreclosures are continuing to rise and the worst is likely still yet to come, according to RealtyTrac Inc., which tracks the foreclosure market.

The wave of adjustable-rate loans resetting to higher rates will peak in May and June, according to the report. And that's likely to result in more defaults and foreclosures in the second half of this year, RealtyTrac Inc. said.

"Once we're through that batch of loans, the worst will have been worked through the system," said Rick Sharga, RealtyTrac's vice president of marketing.

The number of U.S. homes with at least one foreclosure filing rose 57 percent in March to 234,685, compared with 149,150 properties a year earlier. Filings include default notices, auction sale notices and bank repossessions.

The overall foreclosure rate is 5 percent higher than in February, which had an unexpected month-to-month decline over January. March was the 27th consecutive month of year-over-year increases in national foreclosure filings.

One in every 538 households received a filing in March. Nearly half, 44 percent, were households that defaulted for the first time and more than a fifth were homes that banks took back.

Repossession by lenders was up 129 percent over last year, to , 51,393 properties nationwide.

"In a lot of cases, banks worked something out with the owner in advance and took back the keys and deed. For a homeowner, it's not as embarrassing and it's a little less of a blemish on their credit record compared to a foreclosure," Sharga said.

Sharga projects that between 750,000 and 1 million bank-owned properties will be on the market this year, or about a quarter of the homes up for sale.

Nevada had the worst foreclosure rate for the 15th straight month as one in every 139 households received a foreclosure-related notice. That's almost four times the national rate.