Foreclosure filings surge in second quarter

NEW YORK — The number of households facing the foreclosure process more than doubled in the second quarter compared to a year ago, according to data released Friday.

Nationwide, 739,714 homes received at least one foreclosure-related notice during the quarter, or one in every 171 U.S. households, Irvine, Calif.-based RealtyTrac Inc. said.

That was the most since the data company began reporting in January 2005.

“Rising foreclosures are putting downward pressure on prices, increasing the possibility that homeowners will go upside- down on their mortgages,” Sheryl King, chief U.S. economist at Merrill Lynch told Bloomberg News. “That will cause more losses in mortgage portfolios and less willingness from investors to securitize mortgages and therefore fewer mortgages.”

Soft housing sales, declining home values, tighter lending standards and a sluggish U.S. economy have left strapped homeowners with few options to avoid foreclosure. Many can’t find buyers or owe more than their home is worth and can’t refinance into an affordable loan.

Foreclosure filings increased year-over-year in all but two states, North Dakota and Alaska.

In North Carolina, foreclosure filings were reported on 10,511 properties, up 58 percent compared to the same quarter a year ago.

Wake County reported 1,208, a 64 percent increase from last year’s quarter. Durham had 607 and Orange 143.

When compared to the previous quarter, Johnston County declined 19 percent to 212 foreclosure filings. That was up 42 percent from a year ago.

Nevada, California, Arizona, and Florida continued to clock in the highest foreclosure rates. One in every 43 Nevada households received a filing during the quarter.

Cities in California and Florida accounted for 16 of the worst 20 metro foreclosure rates. Stockton, Calif., had the worst rate, with one in every 25 homes in the town receiving a foreclosure filing. That’s nearly seven times the national average.

RealtyTrac monitors default notices, auction sale notices and bank repossessions. Banks took back more than 222,000 properties nationwide in the second quarter, the company said. Bank repossessions accounted for 30 percent of total foreclosure activity, up from 24 percent in the previous quarter.

Economists estimated 2.5 million homes nationwide will enter the foreclosure process this year, up from about 1.5 million in 2007.