NEW YORK — U.S. home-foreclosure filings rose 68 percent in November from a year earlier and may surge in 2008 as adjustable-rate mortgages leave subprime borrowers unable to meet higher payments, according to data compiled by RealtyTrac Inc.
There were 201,950 foreclosure filings in November, including default notices, auction letters and bank repossessions, down 10 percent from October’s total, RealtyTrac reported Wednesday.
California, Florida and Ohio had the most filings, and Nevada had the highest foreclosure rate. Colorado was fourth for its foreclosure rate, with one filing for every 320 households.
Interest rates increased on more than $87 billion of subprime mortgages in the third quarter, and another $84 billion will reset in the fourth quarter, according to New York-based analysts for Credit Suisse Group. Falling home prices have made it difficult for borrowers to refinance into better loans, said Paul Willen, an economist at the Federal Reserve Bank of Boston.
“We think the housing situation will get worse before it gets better,” Willen said. “The real driving force here is home prices. How long it lasts depends a lot on how long it takes for prices to appreciate again.”
Foreclosures probably will surge next year as payments rise on about 1 million home loans, said Rick Sharga, executive vice president for marketing at RealtyTrac, an Irvine, Calif.-based seller of foreclosure information with a database of more than 1 million properties.
Falling prices mean some home owners owe more on their mortgages than the properties are worth, said Jan Hatzius, chief economist for Goldman Sachs Group Inc., the world’s most profitable investment bank. Under those circumstances, a lost job or medical crisis can push people into foreclosure, he said.
“House prices rose too far. You’ve got a large amount of supply and that’s pushing people into negative equity.”
Denver Post staff writer Aldo Svaldi contributed to this report.
