Late payments on subprime mortgages drove up U.S. foreclosure filings in the first quarter of 2007 by more than a third over the same period last year, according to research company RealtyTrac Inc.
Colorado and Nevada led the surge. Colorado’s rate was one filing for every 111 households, a 24 percent increase from the same period in 2006.
Nevada’s rate doubled over a year earlier, with one foreclosure filing for every 75 households, more than three times the national average.
Nationally, almost 437,500 foreclosure filings were reported, a jump of 35 percent from the first three months of 2006, Irvine, Calif.-based RealtyTrac said.
“We estimate that more than 50 percent of the foreclosure activity we charted in the first quarter was from subprime loans,” RealtyTrac chief executive James Saccacio said in a statement.
The number of subprime mortgages, given to borrowers with bad or limited credit histories, rose to 20 percent of the market last year from 5 percent in 2001, according to the Washington-based Mortgage Bankers Association. Homeowners with standard subprime loans were 10 times more likely to enter the foreclosure process in February than owners with good credit, according to First American LoanPerformance, a San Francisco consulting firm.
First-quarter foreclosure filings rose 27 percent from the fourth quarter.
Nationally, 37 states reported gains over last year. One of every 264 households moved into the foreclosure process, which can range from default notices for late payment to auction sales and bank repossessions, RealtyTrac said. Banks typically start the process after mortgage payments are 90 days late.
“It’s not just low-end homes that are going into foreclosure,” Saccacio said. “We’re seeing a rising percentage of foreclosures with an estimated market value of more than $750,000.”
The U.S. rate is the highest since Real tyTrac began reporting in January 2005.
