Goodbye Winter, Hello Foreclosures

Foreclosures shot up again last month as California and Florida led the way.

ByABC News
April 14, 2008, 5:26 PM

April 15, 2008 — -- The start of spring hasn't made things any easier for U.S. homeowners.

Foreclosures shot up 57 percent last month, compared with March 2007, according to RealtyTrac Inc.

The California-based firm reported foreclosure filings nationwide for 234,685 properties last month, or one in every 538 U.S. households. The rate of foreclosure in several states was dramatically higher, including Nevada, where one in every 139 households received a foreclosure filing.

California had the most March foreclosure filings, with 64,711. Florida and Ohio had the dubious distinctions of ranking second and third, respectively, behind the Golden State.

Rick Sharga, RealtyTrac's vice president of marketing, said the increase in foreclosures is part of the continued fallout from the downturn of the housing market.

"It's largely driven by some of the bad underwriting we saw a couple of years ago -- subprime loans, adjustable rate loans that have really come back to bite homeowners," Sharga said in an interview with ABC News. "A lot of the activity really stems from affordability problems. We had people overextending themselves to buy properties that they really couldn't afford without this sort of toxic financing we've been seeing."

It's a problem housing watchers have been bemoaning for months now and Sharga said that, without federal government intervention, foreclosure filings probably won't peak until the third or fourth quarter of this year.

"There will probably be a lot of bank-owned homes on the market this year, which increases the inventory of homes for sale," he said. "Until you work through that inventory, it's going to be a while before the market comes back to normal."

Bank repossessions were up nearly 129 percent over last year but foreclosure auctions increased by 32 percent, indicating that more homeowners turned their homes over to their lenders instead of spending time and money on full foreclosure proceedings.

"[M]ore defaulting homeowners are simply walking away," RealtyTrac chief executive James J. Saccacio said in a recent statement.