Foreclosures Jump 51 Percent Nationwide as Home Loan Defaults Increase

Across the Sunshine State, California home loans foreclosured at a rate 94 percent higher than last year; 157,417 homes in the state fell into default in 2006, as homeowners struggled with fast-rising home payments and a slow-selling market, according to a Fair Oaks real estate investment advisory firm on Monday.

California had the most foreclosures filed nationwide, while Nevada mortgage holders had the largest percentage increase at 175 percent last year compared to 2005, according to Foreclosures.com.

Nationwide, almost 971,000 foreclosure filings were reported last year, 51 percent more than the 641,000 in 2005, according to the annual report.

The Southwest region was the hardest hit, accounting for one of almost 2.2 foreclosure filings. The region includes Arkansas, Louisiana Oklahoma, Texas and the Western states. Four states in the region - Louisiana, New Mexico, Oklahoma and the Oregon housing market - reported fewer foreclosure filings last year compared to 2005.

Despite the dismal national and state reports, the housing market will improve, said Alexis McGee, president of Foreclosures.com. The company has been tracking the foreclosures since 1992.

“Home inventories now are dropping and markets are improving,” she said in a news release. “That means relief to overextended homeowners who bought homes they couldn’t afford with the help of little money down and low teaser-rate mortgages.

Until now, with mortgage payments adjusting upward, housing inventories climbing and prices stagnating, these homeowners have had few options but to lose their house to foreclosure or capture some of their equity with a fresh start with a quick, honest investor purchase.”

The current housing market may be the best opportunity for home-shoppers in the next six years, McGee said. Potential mortgage applicants should take this under consideration.