Foreclosures are Up, But Workouts are Up Too 11-1-2007

U.S. foreclosures doubled in the third quarter compared with a year earlier, mortgage data company RealtyTrac, reports. There were 635,159 foreclosure filings in the quarter, or one for every 196 households. California, Florida and Ohio accounted for 44 percent of the total. Nevada had the highest foreclosure rate at one for every 61 households. The foreclosure issue doesn’t appear to be going away anytime soon. About 2.91 million subprime borrowers have adjustable-rate mortgages, some 90 percent of which will have reset at higher interest rates by the end of 2008, according to San Francisco-based First American Loan Performance, the research unit of the largest U.S. title company. But these numbers alone make the situation sound worse than it is, says John Robbins, CEO of American Mortgage Network and former chairman of the Mortgage Bankers Association of America. "Half of loans going to foreclosures never go completely through the process, and every major servicer has a dedicated group that does nothing but loan modifications," Robbins says. "If you take that, and the Fannie Mae and Freddie Mac and FHA programs for subprime borrowers, there's going to be an impact.'' Source: Bloomberg, Dan Levy (11/01/2007)