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NEW YORK (Reuters) - Home foreclosure filings in October edged up 2 percent from September but at 224,451 were a whopping 94 percent higher than a year earlier, real estate data firm RealtyTrac said on Thursday.

The figure, a sum of default notices, auction sale notices and bank repossessions, was down from a 32-month peak in August however, RealtyTrac, an online market of foreclosure of properties, said in its monthly foreclosure market report.

RealtyTrac said the national foreclosure rate was one filing for every 555 U.S. households in October.

“Overall foreclosure activity continues to register at a high level compared to last year but it appears to have leveled off over the past two months after hitting a high for the year in August,” James Saccacio, chief executive officer of RealtyTrac, said in a statement.

In September, home foreclosure filings fell 8 percent.

Default rates in the subprime segment of the U.S. mortgage market, which caters to borrowers with poor credit histories, have jumped this year as the housing industry slowed and prices fell in many regions, particularly areas that benefited the most during the housing market’s boom from 2000 to 2005.

“Default notices were down nearly 9 percent in October, indicating that some of the efforts on the part of homeowners, lenders and advocacy groups to find alternatives to foreclosure may be starting to have an impact. On the other hand, bank repossessions were up nearly 35 percent, evidence that more homeowners who enter foreclosure are losing their homes,” Saccacio said.

Nevada, once one of the hottest real estate markets and a favorite among investors, led the nation with one foreclosure filing for every 154 households, 3.6 times the national average. Its 6,618 filings were up 20 percent from September and were nearly triple those reported in October 2006.

California foreclosure activity fell nearly 2 percent from the previous month, but its rate of one filing for every 258 households still ranked the second-highest in the nation.

California’s reported foreclosure filings totaled 50,401, more than triple the number reported in October 2006.

Florida’s rate of one foreclosure filing for every 273 households ranks it third-highest. Its 30,190 filings in October were down more than 9 percent from September but still up nearly 165 percent from a year earlier.

Ohio, Georgia, Michigan, Colorado, Arizona, Indiana and Illinois were other states with foreclosure rates ranking among the country’s 10 highest.

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Ohio’s foreclosure rate cracked the top five nationwide in October as the pace more than doubled from last year, a company that tracks housing foreclosures reports.

RealtyTrac Inc.’s October statistics on pre-foreclosure and foreclosure activity show the state ranked No. 4 nationwide with one foreclosure for every 290 households. This marks the third time this year Ohio has entered the top five states nationwide for its foreclosure rate and its highest year-to-date ranking.

The foreclosure rate, which accounts for 7,866 properties reclaimed by banks, is more than double the state’s rate in October 2006 and up 10 percent from September. Another 5,673 Ohio properties in October received notices of trustee or foreclosure sales, RealtyTrac reported.

Leading the nation again in foreclosures was Nevada, with one foreclosure for every 154 households. California was a distant second with one foreclosure for every 258 households, followed by Florida with one for every 273 households. The national foreclosure rate in October hit one for every 555 households, nearly double the rate in October 2006.

Irvine, Calif.-based RealtyTrac publishes an online national database of pre-foreclosure, foreclosure, resale and new homes.

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Real Estate News from the We Buy Houses team

Under fire for the explosion of failed mortgages that has led to a national foreclosure crisis, lenders promised U.S. mayors in Detroit on Tuesday that they will pay for credit counseling hotlines and assemble a database to help untangle who owns foreclosed properties.

The U.S. Conference of Mayors, lenders, banks and nonprofits that help people with their loans huddled behind closed doors at the MGM Grand Detroit to brainstorm how to rein in the number of people losing their homes.

The Mortgage Bankers Association committed Tuesday to donating $100 for every property in foreclosure — about 1 million properties — to hotlines designed to help people avoid foreclosure.The association also launched a database of all the loans in foreclosure, accessible on its Web site. The database will allow people to find out which lender is responsible for a foreclosed house and who the loan servicer is on the house.

The association also said it would make its studio in Washington available to mayors to film a public service announcement about foreclosures, similar to one it did for Detroit Mayor Kwame Kilpatrick that hasn’t aired yet.

Paul Richman, the association’s senior director of government affairs, said the steps are being taken to help address the need created by some in the industry.

“We understand we need to prospectively be more careful in the future,” he said after the meeting.

Kilpatrick said the database would prove useful because residents inundate city halls with complaints about foreclosed homes with overgrown lawns and broken windows.

But many often struggle to find answers because it can be difficult to figure out who’s responsible for the property, he said.

“Now we’ll know better who has the major responsibility for getting those houses in order,” Kilpatrick said.

Both the database and money for hotlines would be a big help, said Ava Tinsley of the Boston-Edison Association in Detroit. The association is involved in helping people facing foreclosure.

It’s difficult to determine which entity has seized a house when it is foreclosed — a bank for a mortgage or a government for taxes, Tinsley said.

And the demand for counseling help is immense, she said.

“There are so many people out there who need help and don’t realize they need help until it’s the ninth hour,” she said.

Earlier in the day about 10 demonstrators protested the meeting outside the hotel. They called for states to use laws already on the books to put a moratorium on foreclosures.

After being told by nonprofits that 72% of those in foreclosure have the wherewithal to remain in their homes if given proper help, the mayors said it’s essential to convince people nearing or in foreclosure to seek help.

Officials said three-quarters of those in foreclosure are not deadbeats, but caught in poorly designed loans — part of the subprime market where loans began with cheap initial interest rates that later ballooned to unaffordable levels.

“What we have is an unbelievable number of people in bad products,” said John Taylor, president and chief executive officer of the Washington-based National Community Reinvestment Coalition.

Mayor Douglas Palmer of Trenton, N.J., the president of the National Conference of Mayors, said the problem doesn’t affect just those in foreclosure.

“The foreclosure crisis has the potential to break the back of our economy as well as the back of our families if we don’t do something about this soon,” Palmer said.

In metro Detroit, it is the subprime collapse, coupled with a poor economy, that has fueled large numbers of foreclosures.

Earlier this month, RealtyTrac reported 1 in 33 homes in metro Detroit was subject to a foreclosure filing — second in the nation behind Stockton, Calif.

Having the mayors team up could bring key pressure on Washington and state governments to put reforms in place to protect borrowers, Taylor said.

“A concerted effort with a team of mayors, I think, could be very effective,” he said.

Charles Ballard, an economics professor at Michigan State University, said while one mayor would not be able to effect much change, a coalition of them could put considerable heat on the lending industry.

“If you’re the CEO of a major company and you don’t want the bad press associated with being the foreclosure king, that might have an effect on you,” he said.

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Colorado had the seventh-highest foreclosure rate in the nation in October, edging up from number eight in September, according to data released Thursday.

A total of 5,379 foreclosure filings were made in Colorado in October, or one per every 382 households, according to RealtyTrac, a California-based marketer of foreclosure properties.

Colorado¹s foreclosure rate was down more than 14 percent from September, and down nearly 4 percent from October 2006.

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Colorado topped RealtyTrac’s monthly index for most of 2006, but has slipped down the list in 2007.

Nevada topped the most recent state-by-state foreclosure rate comparison for the tenth month in a row, with one foreclosure filing for every 154 households in October. The remainder of the top 10 were, in descending order: California, Florida, Ohio, Georgia, Michigan, Colorado, Arizona, Indiana and Illinois.

California, Florida and Ohio had the largest total numbers of foreclosure filings in October.

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Real Estate News from the We Buy Houses team 

By Dan Levy

Nov. 29 (Bloomberg) — U.S. home foreclosures almost doubled in October from a year earlier as subprime borrowers struggled to make higher payments on their adjustable-rate mortgages, according to data compiled by RealtyTrac Inc.

There were 224,451 foreclosure filings, including default notices, auction notices and bank repossessions, a 94 percent jump from October 2006 and a 2 percent increase from the previous month, RealtyTrac reported today. California had the most filings with 50,401 and Florida was second with 30,190. Nevada had the highest rate, one for every 154 households, more than triple the national average.

Bank repossessions increased 35 percent, providing “evidence that more homeowners who enter foreclosure are losing their homes,'’ James Saccacio, chief executive officer of RealtyTrac, said in a statement. The Irvine, California-based seller of foreclosure data has a database of more than 1 million U.S. properties.

Foreclosures are adding to an 11-month supply of unsold homes, the highest in more than eight years, in the worst U.S. housing slump in 16 years. The declines in home sales and prices have raised concerns consumer spending may drop and push the world’s biggest economy into recession.

Defaults on mortgages to borrowers with poor credit history have forced the world’s biggest banks, including Citigroup Inc. and Merrill Lynch & Co., to record losses of more than $45 billion on collateralized debt obligations.

Home Sales

Existing home sales fell to the lowest annual rate since 1999, the National Association of Realtors in Chicago reported yesterday. About 1 million adjustable-rate loans to subprime borrowers, people with weak or spotty credit histories, will reset to higher rates next year and could lead to more foreclosures, RealtyTrac said.

October’s foreclosures total was almost 9 percent less than August’s peak, Saccacio said. Efforts by homeowners, lenders and advocacy groups to find alternatives to foreclosures “may be starting to have an impact,'’ he said.

Inland California cities had six of the top 10 foreclosure rates among U.S. metro areas, RealtyTrac said. Merced in the state’s Central Valley had the highest, with one filing for every 82 households, almost seven times the national average. Stockton and Modesto ranked second and third, respectively, and Riverside-San Bernardino and Vallejo-Fairfield were sixth and seventh. Sacramento ranked ninth.

Las Vegas had the fourth-highest rate, one filing for every 120 households, and Detroit was fifth with one for every 131 households. Cape Coral-Fort Myers, Florida ranked eighth and Cleveland was 10th. The national foreclosure rate was one for every 555 households.

Following California and Florida, Ohio had the third most filings with 17,276. Michigan was fourth with 13,415 and Texas was fifth with 12,288. Georgia, Illinois, Nevada, New York and Arizona were also in the top 10.

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DETROIT (AP) — Rising foreclosures will lead to billions of dollars in lost economic activity next year in the nation’s major metropolitan areas, but homeowners and financial institutions have the ability to work together to contain the effects, according to a report compiled for the U.S. Conference of Mayors.

The report was released Tuesday ahead of a meeting of mayors from across the country in Detroit, where they hope to create policy recommendations to help address the nation’s housing crisis.

Prepared by forecasting and consulting firm Global Insight, the report said weak residential investment, lower spending and income in the construction industry and curtailed consumer spending because of falling home values will combine to hold back the nation’s economic activity.

“The wave of foreclosures that has rippled across the U.S. has already battered some of our largest financial institutions, created ghost towns of once vibrant neighborhoods — and it’s not over yet,” the report said.

The biggest losses in economic activity are projected for some of the nation’s largest metropolitan areas. New York is expected to lose $10.4 billion in economic activity in 2008, followed by Los Angeles at $8.3 billion, Dallas and Washington at $4 billion each, and Chicago at $3.9 billion.

The report estimates U.S. gross domestic product growth in 2008 will be 1.9 percent, coming in about $166 billion — or one percentage point — lower as a result of mortgage problems. GDP is the value of goods and services produced and is considered the best barometer of the country’s economic fitness.

The report also projects property values will decline by $1.2 trillion in 2008, due in part to the foreclosure crisis, with drops in home prices across the U.S. averaging 7 percent. And it said the loss of property, sales and real estate transfer taxes will hurt local and state governments.

But homeowners, banks, holders of mortgage-backed securities and loan servicers can work together to ease the economic effects, the report said. Agreeing to new payment terms on some loans, for example, could make the difference between a family keeping a home and losing it in foreclosure.

“Such actions will help to lessen the number of foreclosures thereby avoiding the further negative effects on local housing markets and on the broader economy,” according to the report, titled “The Mortgage Crisis: Economic and Fiscal Implications for Metro Areas.”

The National Forum on Homeownership Preservation and Foreclosures, organized by the Conference of Mayors, includes discussions about the state of the mortgage industry, ways homeowners can avoid foreclosure, and strategies to keep foreclosed properties from dragging down the quality of life in neighborhoods.

Recommendations developed at Tuesday’s forum, which is closed to the media, are to be presented at a Conference of Mayors meeting in January.

“We’re coming to Detroit with a dogged determination to fight for the families in our cities, our cities and the national economy,” said Douglas Palmer, mayor of Trenton, N.J., and president of the mayors group. “We’re optimistic that we’re going to come up with models that will work.”

In addition to Palmer and Detroit Mayor Kwame Kilpatrick, who is hosting the gathering, mayors expected to attend include Jerry Abramson from Louisville, Ky.; Michael Coleman from Columbus, Ohio; Richard Kaplan of Lauderhill, Fla.; Brenda Lawrence of Southfield, Mich.; and Elaine Walker of Bowling Green, Ky.

The housing market slump has made it harder for financially strapped home buyers to sell their homes and avoid missing payments or losing their homes in foreclosure. Increasingly, many borrowers who took out adjustable-rate mortgages and other loans with monthly payments that increase after an initial period also are finding they can’t afford the higher payments.

Jim Diffley, managing director of Global Insight’s regional services group, wrote the report with his team and was to discuss the forecasts during the mayors’ meeting. He said the goal was to provide a broad look at the effect of foreclosures, a problem mayors are keenly aware of locally.

“This is not a new issue,” Diffley said. “We’ve know about it. It’s been swelling up.”

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Real Estate News from the we buy houses team

CONCORD, Calif. -Standing on the edge of a swimming pool gone bad, public health worker Jeremy Tamargo scoops up a sample of murky, brown water to make sure the mosquito treatment he administered earlier is still working.

A collection of plastic toys stashed in a corner of the yard and a stuffed toy floating forlornly in the swampy water indicate a family once played here, until foreclosure forced a move.

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Detroit and two metro areas in California posted the highest foreclosure rates among the country’s 100 largest metropolitan areas in the third quarter this year.

Things did not turn out the way Jose Miralla planned when he bought a four-bedroom house in Southern California last year.

Miralla, a newlywed, wanted to give his bride a home with a view of the mountains. Now three months behind on the mortgage, he’s struggling to hold on to the house.

“All the dreams we had to be together, to have a life together have just been ruined,” he said.

Miralla, who has a high-interest subprime loan, is among the hundreds of thousands of homeowners who face foreclosure. Many of them are Hispanic — foreclosures in the community are estimated to reach $24.8 billion this year, according to the National Association of Hispanic Real Estate Professionals.

The real estate boom of recent years ushered a record number of Hispanics into the housing market. The community hit a milestone this year: Half now own homes. But the recent credit crunch and escalating foreclosure rates threaten to erode some of the gains.

“For many in our community, homeownership is the key to making the American dream a reality,” said Sen. Robert Menendez, D-N.J., the son of Cuban immigrants. “We need to do everything possible to prevent these families from losing their homes.”

Miralla’s troubles began on closing day, when he was presented with a higher interest rate than he expected. With a credit score of 670, 50 points higher than the general cutoff for a subprime loan, Miralla says he could have qualified for a better rate. But he accepted the higher rate for fear of forfeiting a $5,000 security deposit.

Miralla, who sells home alarm systems and works on commission, figured he could make the payments although money would be tight. But his sales figures slipped.

Miralla, 44, and his wife now make about $3,200 a month. The mortgage on his $390,000 home in Beaumont, Calif., is $2,900.

He is among the 42 percent of Hispanics — nearly twice the rate of whites — who have taken out subprime loans. Those loans, which are typically made to borrowers with poor credit ratings, are more likely to go into default.

Adjustable-rate mortgages to subprime borrowers accounted for about 44 percent of all new foreclosures in the second quarter of this year, according to the Mortgage Bankers Association. Many subprime borrowers also refinanced their homes to pay off credit card debt or pay for costly remodeling projects.

“One of the things we’re seeing is people who have no equity in their property,” said Jill Perry, who works for Consumer Credit Affiliates, a nonprofit that offers housing counseling in northern Nevada. “They’ve used their house as their ATM.”

Others, including Hispanics who have trouble understanding English, were given loans they could never have afforded or that quickly reset at higher interest rates, according to counselors and real estate agents.

In the past three months, 450,000 properties were in foreclosure proceedings nationally, according to RealtyTrac, a home loan database. Nevada, California and Florida, which have large Hispanic populations, were the top three states for foreclosures.

Lawmakers have introduced dozens of bills to deal with the housing crisis. One by Rep. Barney Frank, D-Mass., seems to be getting the most traction.

It would prevent lenders from making loans to borrowers who can’t repay, ban them from steering homeowners into costly refinancing, and create a licensing system for mortgage brokers and bank loan officers.

But industry leaders who advocate for some reform worry that lawmakers could make it even tougher for Hispanics to get loans.

“Rather than looking for more restrictions, I’m looking for more flexibility on the kinds of products that can be made available,” said Tim Sandos, president of the Hispanic real estate group.

He said Hispanics often need flexible loans that take into account their circumstances: Recent immigrants who don’t have established credit, workers who make the bulk of their income in tips or cash, and those who need help with down payments.

Aside from credit scores and pay stubs, lenders could find other ways of gauging borrowers’ chances of defaulting on their loans, advocates say. For instance they could verify bank balances over time and check whether they paid rent and other bills promptly.

“I am a believer in subprime but not in unscrupulous practices,” said Rep. Albio Sires, D-N.J., who notes that many Hispanics were able to buy homes using subprime loans. “We are people who want the opportunity this country has to offer.”

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While the housing foreclosure crisis of 2007 negatively impacted many homeowners with shaky financial histories, thousands of families are losing their homes without ever missing a payment. These residents are renters who had the unfortunate luck of living in houses whose landlords defaulted on their mortgages — a large but little noticed externality of the subprime fallout.While it remains unclear many renters have been evicted because of foreclosures, the Mortgage Bankers Association took a survey earlier this year and found that one in eight foreclosures was non-owner-occupied. But the association acknowledges that this figure likely “underestimates the problem” because building managers have an incentive to register as owner-occupied for tax reasons, even if the units are rented.

According to the New York Times, “in Nevada, which has one of the highest foreclosure rates in the country, 28 percent of mortgages that were in default earlier this year were for homes not owner-occupied, more than twice the national average.” Arizona, Florida, and California, all states hit hard by foreclosures, are well above the national average as well.

“This is an explosion,” said Judith Liben, a lawyer at the Massachusetts Law Reform Institute. “This isn’t business as usual. These are investors that overleveraged themselves, and the renters are collateral damage in the mortgage crisis.”

Although the stakes are lower for renters than homeowners, mostly because renters do not stand to lose years of equity, many renters “feel blindsided by the news that they could be evicted, especially if they have been diligent in their rent payments.” Cash for moving expenses and deposits on new rental properties can also be a financial drain, especially for tenants who had no idea their buildings were in danger of foreclosure.

On Thursday, the House passed a comprehensive mortgage act that includes protections for renters. “The House act,” reports the Times, “which the lending industry has opposed, would require new owners to continue the leases of tenants for up to six months after foreclosure.”

Senator Christopher J. Dodd, Democrat of Connecticut, who introduced similar legislation in the Senate, said in a statement, “A foreclosure doesn’t differentiate between a homeowner and a renter residing in a defaulting property.” Currently, most state or local laws do not provide this protection.

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If ever there were a public relations success story, RealtyTrac is it.

The Irvine-based firm’s monthly news releases, chock-full of state-by-state foreclosure counts, are devoured by a national media ravenous for data on what many consider a developing crisis.

Since RealtyTrac began putting out the news releases in 2005, the number of unique visitors to its Web site has tripled to 3 million a month, said Rick Sharga, RealtyTrac’s vice president of marketing. That’s hugely important for the company because selling foreclosure listings through its Web site is how RealtyTrac makes money.

But questions are being raised about whether the firm’s oft-cited numbers overstate the real dimensions of the foreclosure problem. And that could create a problem for the company’s credibility.

For example, last year, RealtyTrac’s data showed Colorado had the nation’s highest foreclosure rate. That didn’t sit well with state officials, who decided to do their own count of foreclosures and came up with a figure much smaller than RealtyTrac’s.

Then, in July, RealtyTrac reported 12,602 foreclosure actions in Georgia, giving the state the nation’s second-highest foreclosure rate. When the Atlanta Journal-Constitution looked into the numbers, the newspaper found that RealtyTrac had counted more than 2,000 properties twice and sometimes more.

RealtyTrac acknowledges it isn’t perfect but says its data offers comprehensiveness and context that other providers don’t.
Why the discrepancies?

The main reason is that RealtyTrac counts every step in the foreclosure process. So if a home goes into default on its mortgage, is scheduled for auction and then repossessed by a bank, RealtyTrac counts that home three times.

RealtyTrac counted 54,747 “foreclosure actions” in Colorado last year.

That number wasn’t useful because it didn’t reflect how many homeowners were actually in danger of losing their homes, said Ryan McMaken, spokesman for the Colorado Division of Housing. “We couldn’t really use those numbers for having serious discussions,” he said.

So McMaken put an intern to work calling all of the state’s 64 counties to get a count of how many homes entered the foreclosure process last year. The number he came up with: 28,435.

This summer, partly in response to criticism, RealtyTrac began sorting its numbers to compile a separate count of properties in foreclosure, in addition to total foreclosure actions. RealtyTrac’s “unique property” count, published quarterly, found 19,411 properties in foreclosure in Colorado in the first half of this year. That’s within a few dozen of the 19,460 counted by McMaken.

“I think they’re getting a lot closer now,” McMaken said, adding that “we might not have to collect our own numbers” anymore.

In the Georgia situation, RealtyTrac admitted it erred. It revised its July count for the state to 8,461 foreclosure actions, down from its initial count of 12,602.

“The reporting error resulted from a combination of overlapping data coverage in some areas of Georgia and an anomaly in the formatting of some of the foreclosure records in those overlapping areas,” the company said.

RealtyTrac could probably mute much of the criticism of its data if it simply published its unique properties count every month in addition to its total filings count. That’s something the company is considering doing next year, Sharga said.

But Sharga argues that there’s value in looking at data on all the steps of the foreclosure process, too. For example, in California, less than 20 percent of homes that enter foreclosure go all the way through the process to be repossessed by a bank, while in the Detroit area, it’s more like 30 percent or 40 percent, he said.

“If you know what you’re looking for, there’s very important contextual information if you look at the stages in filings,” he said.

Does it matter how the data are counted?

Jack Kyser, chief economist with the Los Angeles County Economic Development Corp., argues that it does.

Figures that overstate problems in the housing market “become sort of a self-fulfilling prophecy in that people are afraid to go out and look for a home,” Kyser said.

Moreover, inflated data on foreclosures could prompt politicians to push through ill-considered mortgage reforms.

“You do something that’s good, but it’s the law of unintended consequences,” Kyser said.

Kyser said he’s aware of the questions surrounding RealtyTrac’s data and won’t use it.

“If I want information I can rely on, I’ll go to First American or DataQuick,” he said.

First American and DataQuick are both respected providers of real estate information, but neither publicizes data on foreclosures with the monthly frequency and national scope of RealtyTrac’s releases.

Randy Green, a former director of data acquisition at RealtyTrac who is now with competitor ForeclosureTrackers.com, said RealtyTrac doesn’t have the same data-handling standards as First American or DataQuick, which have been in business longer. RealtyTrac was formed in 1996.

Other factors that could cause RealtyTrac’s counts to be higher than others: The company doesn’t filter out duplicate filings if two or more loans on the same property go into default, and its monthly reports are based on the date that foreclosure actions enter its database, rather than the recording dates, Sharga said.

“We’re not perfect; we don’t claim to be,” Sharga said. “When we do find a mistake, we fix it … and try not to replicate that.”

Having made its name partly through its news releases, RealtyTrac is well aware of the importance of being a credible data provider, Sharga said.

“We recognize there’s a responsibility with this stuff,” he said. “We do everything we can to treat it with integrity.”

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NEW YORK - Eighty-five bungalows dot the cul-de-sac that joins West Ontario Avenue and East Ontario Avenue in Atlanta. Twenty-two are vacant, victims of mortgage fraud and foreclosure. Now house fires, prostitution, vandals, and burglaries plague this historic neighborhood called Westview Village.

“It’s created a safety hazard. And if we have to sell our house tomorrow, we’re out of luck,” said resident Scott Smith. “Real estate agents say to me ‘We’re not redlining you, but I tell my clients to think twice about buying here.’ ”

As defaults surge on mortgages made to borrowers with spotty credit and adjustable-rate loans, more people are noticing that their neighbors are caught up in the meltdown. Their misfortunes are haunting those left living on the same streets. The effects aren’t confined to just low-income or redeveloping communities; they are seeping into middle-class neighborhoods and brand new developments.

Smith, the vice president of Westview Community Organization Inc., keeps a map of the area, tracking each vacant property and notifying local officials when nefarious activity is suspected.

Georgia has the eighth largest foreclosure rate in the nation, one filing for every 142 households, according to a third-quarter report from foreclosure tracker RealtyTrac Inc. Nevada has the worst rate with one filing in every 61 households, while the nationwide rate is one filing for every 196 households.

“They’ve seen a lot of prostitution in the area, vagrants wandering in and out of the empty houses, and drug activity,” said Officer Dakarta Richardson of the Atlanta Police Department. “Some people that I talked to are afraid to walk out of their homes at night.”

Some other people in the area have been affected by break-ins, and there have been house fires in several of the vacant homes in the past year, Richardson said.

The rise in crime in Westview is typical of a neighborhood struggling with numerous foreclosures, according to a recent study by Dan Immergluck of Georgia Institute of Technology in Atlanta and Geoff Smith of Woodstock Institute in Chicago.

That study showed that when the foreclosure rate increases one percentage point, neighborhood violent crime rises 2.33 percent.

“The key here is the concentration of those foreclosures at a neighborhood level. When you have more than one foreclosure in a few block area, that’s when you start to think about the effects on property values and the effects on crime,” Immergluck said.

A report published last week by the Center for Responsible Lending, a Durham, N.C.-based consumer advocate, estimates that 44.5 million US households will see their property values decline a combined $223 billion as foreclosures surge in coming years, particularly in minority communities.

Historically the most affected areas were lower-income and were prone to subprime and predatory lending, irresponsible house flipping, and mortgage fraud, Immergluck said.

However, “the problem now is on a different scale,” he said. “It’s affecting a lot more suburban, moderate-income places” as more people of different incomes default on riskier loans.

In the Franklin Reserve neighborhood of Elk Grove, Calif., full of subdivisions with half-million-dollar homes, homeowners are fighting inner-city problems like gangs, drugs, theft, and graffiti.

During the boom, the suburb just south of Sacramento sprouted 10,000 homes in four years, attracting investors from the San Francisco area. Now many houses stand empty, weeds overtaking lawns, signs lining the street: “Bank Repo,” “For Rent,” “No trespassing - bank owned property.” A typical home’s value has dropped from about $570,000 to the low $400,000s.

California ranks second in the nation with one foreclosure filing for every 88 households, RealtyTrac said.

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Subprime loan foreclosures are having a spillover effect on communities, resulting in an estimated price tag for the nation of $223 billion, according to a new report.

The Center for Responsible Lending report cites Missouri as one of 24 states that each are projected to experience declines of more than $1 billion in local home values, which affects tax collections.

The study is one of the first attempts to distill the subprime-mortgage meltdown to a cost in the form of reduced housing values, which can create a ripple effect resulting in lower community revenues for schools, law enforcement, social welfare and other services.

“Subprime problems have become everyone’s problem,” Martin Eakes, the chief executive officer of the center, a nonpartisan research and policy organization, said Tuesday at a Washington news conference.

The study’s conclusions are underscored by statistics to be released today that show foreclosures on all loans nationwide have increased 100 percent from a year ago and 30 percent since June.

The Kansas City region, as is usually the case in such studies, fared relatively better than the national averages, even though foreclosures here also are up.

Kansas City’s metro area had an 80 percent increase in foreclosures over the last year, according to California-based RealtyTrac, which publishes the nation’s biggest database of foreclosures. Kansas City’s rate of one foreclosure for every 234 households ranked 54th among the 100 metro areas in the study.

Missouri foreclosures increased 74 percent from last year and Kansas foreclosures rose 22 percent, according to RealtyTrac.

“I don’t think it’s bottomed out yet,” said Tim Harrison a real estate investment consultant Overland Park. “Across the board, in every neighborhood you are seeing foreclosures are up.”

Rick Sharga, a spokesman for RealtyTrac, said he expected high levels of foreclosures well into 2008, citing $300 billion worth of subprime loans with adjustable rates that will reset early next year. “Until they work their way out of the system we’ll continue to see high levels of foreclosure activity,” he said.

Eakes said the center’s statistics are conservative. He said the center looked only at foreclosures involving families who obtained adjustable rate subprime mortgages, which generally are made by lenders to debtors with shaky credit.

The study did not look at additional home foreclosures related to investor fraud or rental homes, which have added to the number of vacant homes in urban areas.

He said the center focused on subprime loans because they have had the most immediate effect on families who are losing their homes at a quickening rate as their adjustable rate mortgages suddenly rise to unaffordable rates.

Eakes said the study used a methodology used in a prior research that found a foreclosure on a home lowered the price of other nearby single-family homes, on average, 9 percent. The research also indicated that downward pressure on housing prices extended to houses that sold within two years of the foreclosure.

Based on that calculation, the center found that 44.5 million neighboring homes will experience a decline in value because of subprime foreclosures that took place nearby. The study said that homeowners living near foreclosed properties will see their property values decrease $5,000 on average.

“Foreclosures are cumulative,” Eakes said.

Shanna Smith, the president of the National Fair Housing Alliance, said the result is “a foreclosure catastrophe” brought on by lenders who pushed many consumers into more expensive subprime loans when they could have afforded less punitive conventional fixed-rate loans.

Innovative loans with low adjustable “teaser rates” that rose sharply within two years have “succeeded in wrecking the future of hundreds of thousands of American families,” she said.

Congress recently has investigated whether banks and other lenders brought the subprime loan meltdown on themselves by structuring loans to get quick profits, without regard to their affordability. Legislation is also proposed that seeks to help people facing the prospect of rising adjustable interest rates that might put them out of their homes.

Local experts say they are not surprised by the numbers in the center’s study.

“I do believe lenders that were doing these subprimes knew they were getting these borrowers into loans they couldn’t get out of,” said James Nutter Jr., the president of James B. Nutter & Co. “They would make six to seven times what we (non-subprime lenders) would make on a conventional loan.”

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Jacksonville was 33rd in the country in number of foreclosure filings per household in the third quarter, according to figures from RealtyTrac Inc.

The report showed Jacksonville had 3,501 properties in some form of foreclosure, or one for every 156 households. That was up 49 percent from the third quarter of 2006 and up 17 percent from the second quarter of this year.

The top three metropolitan areas were Stockton, Calif., with one filing for every 31 households; Detroit/Livonia/Dearborn, Mich., with one filing for every 33 households; and Riverside/San Bernardino, Calif., with one filing for every 43 households.

There were four Florida cities in the top 21 — Fort Lauderdale at No. 4 with one foreclosure for every 48 households; Miami at No. 8 with one for every 60 households; Tampa at No. 19 with one for every 93 households; and Palm Beach at No. 21 with one for every 97 households.

The report also implied the rise in foreclosures may be spreading to areas so far mildly affected.

“Although cities in just three states — California, Ohio and Florida — accounted for more than two-thirds of the top 25 metro foreclosure rates, increasing foreclosure activity was not limited to just a few hot spots,” RealtyTrac CEO James J. Saccacio said in a news release. “In fact, 77 out of the top 100 metro areas reported more foreclosure filings in the third quarter than they had in the previous quarter. Still, there continue to be pockets of the country — most noticeably metro areas in the Carolinas, Virginia and Texas — that have thus far dodged the foreclosure bullet.”

The RealtyTrac Metro Foreclosure Market Report provides the total number of foreclosure filings by metropolitan area and the number of households per foreclosure filing. The household numbers are based on the U.S. Census Bureau’s 2005 estimates of total housing units. Beginning with the Midyear 2007 report, the report also includes counts of properties with at least one foreclosure filing reported against them.

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Sometimes you have to wonder what’s coming out of the water cooler at National Association of Realtors (NAR) headquarters.

The past week has seen the trade group issue a slew of misleading press releases, all intended to jump-start a withering housing market and earn those Realtors a 6% commission. The latest is a prediction of a “modest recovery” for existing home sales in 2008. If you believe that, you need to review the NAR’s hilarious history of ineptitude in predicting future home sales.

On the heels of the ridiculous kid-on-a-swing campaign, the Realtors, partying in Vegas, claimed that 2007 is a great year for housing, despite copious evidence that home prices are tanking at unprecedented and accelerating rates. The fire sales and lousy margins at homebuilders such as Hovnanian Enterprises (NYSE: HOV), Pulte Homes (NYSE: PHM), and D.R. Horton (NYSE: DHI) provide more proof that prices are crashing.

How can the NAR make such a bogus claim, then? Because by their (unsophisticated) measurements, home prices are still near record levels. That’s like saying 2000 was a great year for JDS Uniphase. Memo to the commission-addled non-thinkers at the NAR: We’re on the back side of a bubble. It takes a while for home prices to drop, but they are dropping. The folks who bought in at the top, based on the NAR’s constant stream of “now is a great time to buy” propaganda are now looking at major, leveraged losses in equity. Many will lose everything in foreclosure and bankruptcy.

As RealtyTrac has quantified, foreclosures are rising at an alarming rate. Third-quarter numbers released earlier this month showed a 100% increase in foreclosure activity. Bubbly markets in California, Nevada, and economically sensitive Ohio are being hit especially hard. And developments that are being hit with foreclosures get worse quickly, as an MSNBC story that came across my cell phone this morning explains. Once the bad renters and squatters move in, crime follows, and the property values for occupied, neighboring homes plummets.

The problem is, this is all likely to get a lot worse before it gets better. As recent earnings- and CEO-killing mortgage-backed securities writedowns from Citigroup (NYSE: C), Merrill Lynch (NYSE: MER), Morgan Stanley (NYSE: MS), and Wachovia (NYSE: WB) have made clear, the market for mortgage debt is in deep trouble. No one wants the junk loans that pushed up housing prices in the first place, and that means there’s no more free money to support those ridiculous valuations. With major waves of adjustable-rate mortgages set to reset in the coming months, we’ll see mortgage-backed securities get even uglier, foreclosures increase, and home prices continue to fall.

Anyone who tries to tell you that “it’s a great time to buy” or that “real estate is local” is operating with blinders on. Things are going to get worse all over. The real bargains won’t be in for a while.

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Foreclosure, short-sales, REO sales, trustee auctions, deeds-in lieu — what do all of these technical words mean?

Last month, Lisa Sennott and Diane Corvo, both with Pinnacle Real Estate Group in South Lake Tahoe, attended the Frontline Real Estate Institute Seminar entitled “The Foreclosure Specialist.”

Armed with insight gained at this cutting edge conference, Sennott and Corvo are well versed in the California foreclosure market and recently offered some insight into what may be ahead.

“Adjustable-rate loans are about to re-set at mass volume,” said Sennott, a licensed California attorney and real estate broker. “Homeowners who can no longer afford to keep their mortgage payments current need to know that there are alternatives to bankruptcy and foreclosure proceedings. And these homeowners have options if they act sooner than later, if they become educated on these alternatives before it is too late.”

One alternative is, simply, mortgage re-finance. Even if the terms of the loan prohibit re-financing, or provide for a pre-payment penalty, borrowers are highly encouraged to explore this option.

“Everything is negotiable” maintains Corvo, a long-time Tahoe resident and veteran real estate broker. “A simple phone call to your lender could go a long way these days”.

Banks are facing un-chartered territory, and their loss mitigation departments are becoming more flexible, and more agreeable to simple loan modifications.

The reason why is a bank loses an average of $60,000 each time it acquires and sells an REO (bank-owned) property. There is a huge incentive for banks to get creative and agree to foreclosure alternatives such as loan modification.

Another option available to distressed homeowners is a short sale. A short sale is when the borrower can’t maintain mortgage payments, and the bank allows the property to be sold at a loss, instead of going through the foreclosure process.

With a short sale, the borrower can walk away with his credit mostly intact. There are tax consequences, however, where the difference between the loan balance and purchase price could be treated as ordinary income to the homeowner, according to the IRS. Consulting with a CPA or a tax attorney is always recommended when doing a short sale.

“This seminar really stressed the dire straits of today’s real estate market, and according to these professionals, it is just the tip of the iceberg,” said Sennott.

The number of recorded notices of default is up approximately 250 percent from a year ago. And this trend is expected to continue through 2008.

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NEW YORK (CNNMoney.com) — Foreclosure worries aren’t exclusive to homeowners. Renters are also in danger of losing their homes if their landlord goes into foreclosure. Here’s what you need to know.

Landlords are under no obligation to tell you if they are facing foreclosure. In some states you may get a notice of default when your landlord stops paying the mortgage. But sometimes, there is no warning at all. You don’t have rights if your landlord falls into foreclosure according to Todd Beitler of the Real Estate Library. In some cases, you’ll be forced to move. Other times you’ll just sign your monthly rent check over to someone else.

Here are some signs that you’re landlord is in the red: First, if building maintenance has gotten noticeably slack. Maybe the lawn is overgrowing or there are less building repairs. Look at your local newspapers for legal notices against your landlord. And of course, never discount town gossip.

Whatever you do, just keep making your monthly payments. If you don’t, the landlord could sue you. Unless you are evicted, you still have to abide by your lease. Plus, you don’t want to hurt your credit score with missed payments.

Eviction laws and tenant protection laws vary by state. You’ll want to see what applies in your area. Go to the US Dept. of Housing and Urban Development Web site at HUD.gov.

For example, in Connecticut you can defend against eviction if you’re over 62 years old or your elderly parents live with you. You may also be able buy more time for yourself if you have a special reason for staying on in the home - say your children need to complete the school year.

If you don’t want to move, you may be able to negotiate with the new owner. Remember, your monthly payments are an asset stream. And contact the lender too. You may be able to gather up some incentives for moving. It’s called “cash for keys” program.

It’s basically financial assistance for leaving the property within a certain amount of time and keeping your place in good condition. While it’s unlikely that many lenders will do this today, given the avalanche of foreclosures on the market, according to Beitler, it can’t hurt.

One note to renters who are facing eviction because of foreclosure: Get your security deposit back! As long as you have been keeping up your end of the lease agreement, that’s your money!

Legal documents obtained by the Mortgage Lender Implode-o-Meter Web site show Michael Jackson’s Neverland Ranch in California is in foreclosure.

Jackson’s representative last week denied reports that the singer was about to lose his compound/amusement park because he was not up-to-date on the mortgage payments, TMZ.com said.

“(He) was never in default of the loan,” the representative said.

However, the Mortgage Lender Implode-o-Meter has obtained a “Notice of Default and Election to Sell” document, which states the property is in foreclosure because about $213,000 in payments on the $23 million loan is overdue, the report said.

The notice specifically states “a breach of, and default in, the obligations for which the Trust Deed is security — has occurred,” TMZ.com said.

Jackson could still sell the estate if he can close the deal before the foreclosure is completed.

The singer’s representative told TMZ.com her earlier statement stands.

Sacramento, Calif. (PRWEB) November 14, 2007 — The McGilvray Family Trust of Sacramento is embroiled in a lawsuit against their former tenant, Hanson North America Pipe and Precast, for allegedly turning their nine acre property into an illegal waste dump during Hanson’s 20-year tenancy (see video at http://www.obsnews.com/hanson.htm). Hanson, America’s largest concrete pipe manufacturer and a subsidiary of buildi