Some housing markets in areas like Michigan, Ohio and Indiana that have become synonymous with foreclosures saw some relief in first six months of the year, but there was an uptick in filings in other markets not previously considered foreclosure hot spots, data aggregator RealtyTrac said today.

Trends in RealtyTrac’s Midyear 2009 Metropolitan Foreclosure Report suggest that unemployment is driving new foreclosure activity more than the continuing effects of subprime and adjustable rate mortgage loans made during the boom, RealtyTrac CEO James Saccacio said in a press release.

Some housing markets in areas like Michigan, Ohio and Indiana that have become synonymous with foreclosures saw some relief in first six months of the year, but there was an uptick in filings in other markets not previously considered foreclosure hot spots, data aggregator RealtyTrac said today.

Trends in RealtyTrac’s Midyear 2009 Metropolitan Foreclosure Report suggest that unemployment is driving new foreclosure activity more than the continuing effects of subprime and adjustable-rate mortgage loans made during the boom, RealtyTrac CEO James Saccacio said in a press release.

More than 20 percent of the metro areas where filings exceeded the national average were in states not among those with the worst foreclosure problems, such as Oregon, Idaho, Utah, Arkansas, and South Carolina.

Markets like Provo, Utah, and Boise, Idaho, have seen large increases in foreclosure-related filings, and as unemployment rates increase in different parts of the country, Saccacio said, "It’s very likely that we’ll see similar patterns develop elsewhere."

The Bureau of Labor Statistics on Wednesday released local unemployment data for June showing the jobless rate exceeded 10 percent in 144 of 372 metropolitan areas, up from six a year ago.

Tuscaloosa, Ala., saw the largest month-to-month gain, rising 3.8 percentage points from May to June to 12.5 percent. That compares to the U.S. jobless rate of 9.7 percent (non-seasonally adjusted), up from 5.7 percent a year earlier.

The jobless rate in the Detroit area jumped 2.2 percent from May to June, reaching 17.1 percent — the highest among the 49 metro areas with populations of 1 million or more. Among large metro areas, Detroit was followed by Riverside-San Bernardino-Ontario, Calif. (13.7 percent), Charlotte-Gastonia-Concord, N.C.-S.C. (12.4 percent), Las Vegas-Paradise, Nev. (12.3 percent), and Providence-Fall River-Warwick, R.I. (12.1 percent).

RealtyTrac’s numbers show that during the first six months of 2009, foreclosure hot spots in the midwest like Detroit, Toledo and Cleveland saw a significant falloff in filings, and hard hit California communities like Stockton and Modesto also saw some relief.

That’s not to say that problems don’t remain in the states that have become known for their high foreclosure rates during the downturn.

During the first half of the year, RealtyTrac said in a previous report, about one in 84 U.S. homes was subjected to a foreclosure-related filing (see story). The states with the highest rate of filings were Nevada (one filing for every 16 homes), Arizona (one in 30), Florida (one in 33), California (one in 34), Utah (one in 69), Georgia (one in 70), Michigan (one in 74), Illinois (one in 76), Idaho (one in 79) and Colorado (one in 80).

The latest RealtyTrac report, which tracked foreclosure rates in metro areas with populations of 200,000 or more, showed Las Vegas posting the highest foreclosure rate (one foreclosure-related filing for every 13 homes), followed by Cape Coral-Fort Myers, Fla. (one in 14), Merced, Calif. (one in 15), Riverside-San Bernardino-Ontario, Calif. (one in 17) , Stockton, Calif. (one in 18) , Modesto, Calif. (one in 19), Bakersfield, Calif. (one in 22), Vallejo-Fairfield, Calif. (one in 22) , Phoenix-Meas-Scottsdale, Ariz. (one in 22) , and Orlando, Fla. (one in 23).

With the exception of Stockton and Modesto, foreclosure-related filings were up in the first half of the year compared to either the first or last half of 2008, RealtyTrac said.

RealtyTrac collects data from more than 2,200 counties nationwide that account for more than 90 percent of the U.S. population, recording when homes are subjected to a notice of default, auction notice or bank repossession.

Not all homes subjected to foreclosure-related filings will be taken back by lenders. Some homeowners who default on their loans or whose properties are scheduled for auction are able to refinance their loans or negotiate a loan modification or short sale.

The HOPE NOW coalition of loan servicers said this week that the lending industry has negotiated 1.53 million repayment plans and loan modifications with troubled borrowers in the first half of the year (see story). According to RealtyTrac, about the same number of properties were hit with foreclosure-related filings during the same period.

Since the HOPE NOW alliance’s July 2007 inception, loan servicers have initiated 4.7 million workouts, and there have been 1.68 million foreclosure sales, the group said.

According to a new report examining the performance of subprime and Alt-A mortgages by the Government Accountability Office, about 11 percent of the 14.4 million subprime and alt-A loans originated from 2000-07 have completed the foreclosure process — a total of 1.6 million loans.

Many non-prime borrowers have also refinanced. But among the 5.2 million subprime and alt-A loans that were still active as of March 31, nearly one in four was in default or in the foreclosure process, the GAO report said.

New delinquencies were at the second-lowest level in the last year during June, data aggregator Lender Processing Services Inc. said in another report, and the percentage of loans "rolling" to a more delinquent status declined across all types of mortgages.

Tightened underwriting standards have created "a significant decline in first payment defaults," and lower interest rates have lowered the risk of defaults when hybrid adjustable-rate mortgage (ARM) loans reset, LPS said.

But that didn’t stop the percentage of loans in default or foreclosure from rising to 11.44 percent in June, and the foreclosure inventory rate of 2.86 percent represented a new record, LPS said.

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