Flurry of Foreclosure Activity Spreads Across U.S.

Here’s a troubling fact for homeowners: In September, there was one new foreclosure filing for every 1,122 U.S. households.

Bargain Network, a leading online provider of real estate foreclosure, pre-foreclosure and for-sale-by-owner properties and information, reported that foreclosure activity in the third quarter of 2006 (July-to-September) climbed approximately 14 percent compared to the second quarter.

This also marks a 39 percent increase in foreclosure activity compared to the same quarter last year.

The top five states in the nation represented 66 percent of all foreclosures. They are: Florida, California, Michigan, Texas and Colorado. The latter - the Colorado housing market - leads the country in foreclosure rates.

However, the Florida housing market represented the region with the nation’s highest number of foreclosures, with approximately 28,000 properties entering some stage of the foreclosure process, accounting for 27 percent of the overall nationwide activity.

“Florida and the western states are known for their predominance of negative amortization loans in which mortgage holders pay only interest, not equity on their properties,” stated Tom Adams, President and CEO of Santa Barbara-based Bargain Network.

“We anticipate that foreclosure rates will stabilize, and that foreclosures will continue to be an attractive investment vehicle as a cooling economy and slower housing market force some people who purchased real estate using sub-prime mortgages to default on those loans in the months ahead.”

Therein lies the problem. A number of applicants over the last few years have agreed on terms for bad credit home loans. Now, interest rates are resetting and these borrowers are left with greater monthly bills than ever before.