Foreclosure Filings Soar in 3rd Quarter

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A soaring number of U.S. homeowners struggled to make mortgage payments in the third quarter, with properties in some stage of foreclosure more than doubling from the same time last year, a mortgage data company said Thursday.

A total of 446,726 homes nationwide were targeted by some sort of foreclosure activity from July to September, up 100.1 percent from 223,233 properties in the year-ago period, according to Irvine-based RealtyTrac Inc.

The current figure was 33.9 percent higher than the 333,731 properties in foreclosure in the second quarter of this year.

There was one foreclosure filing for every 196 households in the nation during the most recent quarter, RealtyTrac said.

All but five states reported a year-over-year increase in foreclosure filings, which include notices of default, auction sale notices or bank repossessions, the company said.

A single property can sometimes receive more than one notice in a three-month period.

In all, 635,159 filings were reported in the third quarter, up 99.5 percent from the year-ago quarter and up 30 percent from the second quarter of this year.

RealtyTrac CEO James J. Saccacio said in a statement that August and September accounted for the highest monthly totals since the company began issuing foreclosure filing reports in January 2005.

"Given the number of loans due to reset through the middle of 2008, and the continuing weakness in home sales, we would expect foreclosure activity to remain high and even increase over the next year in many markets," he said.

Mortgage lenders are bracing for a flood of defaults as many adjustable-rate mortgages originated in 2005 and 2006 during the height of the housing market frenzy reset to higher interest rates.

The loans were initially attractive options for buyers because of their cheaper "teaser" interest rates that kept monthly payments low, but even a small percentage increase can translate into a far higher payment.

With home sales in decline and prices down or flat in many regions, more homeowners are landing in foreclosure because they can't afford to sell their homes after falling behind on payments.