Foreclosures across N.C. drop 5 percent in November

Posted December 10, 2009 9:00 a.m. EST
Updated December 10, 2009 1:39 p.m. EST

— Home foreclosures in North Carolina decreased 5 percent from October, real estate firm RealtyTrac reported Thursday.

However, the number of 3,273 properties in some state of foreclosure was 17 percent higher than one year ago.

North Carolina ranked 36th lowest among states overall.

According to RealtyTrac, 1,321 properties were listed for foreclosure, some 405 notices of default were issued, and 1,547 properties were foreclosed and repurchased by a bank.

The total number of properties in some state of foreclosure fell to its lowest total in the past five months.

By month, in North Carolina, RealtyTrac data showed:

• 3,428 in July
• 4,317 in August
• 3,735 in September
• 3,447 in October

Nationally, foreclosure activity dropped 8 percent from October.

(For the complete state-by-state report, click here.)

The decline nationally was the fourth straight, as mortgage companies evaluated whether borrowers were eligible for help.

Nearly 307,000 households, or one in every 417 homes, received a foreclosure-related notice in November, down 8 percent from a month earlier, RealtyTrac Inc. said Thursday. Banks repossessed about 77,000 homes last month, down slightly from October.

Millions of borrowers are still being evaluated for the Obama administration’s foreclosure prevention effort. States are also trying to delay the foreclosure process, temporarily lowering foreclosure numbers.

But the foreclosure crisis is likely to get worse before it gets better.

“We don’t really believe the underlying problems have been resolved,” said Rick Sharga, senior vice president at the Irvine, Calif.-based foreclosure listing service. Many borrowers, he said, “simply aren’t going to qualify” for help.

Foreclosure filings were still up 18 percent from a year ago, and a new wave is expected next year as unemployment remains high and borrowers fall out of loan modification programs.

Nevada’s posted the nation’s highest foreclosure rate, followed by Florida, California, Arizona and Idaho. Rounding out the top 10 were Michigan, Illinois, Utah, Maryland and New Jersey.

Among cities, Merced, Calif. had the highest rate, with one in 83 homes receiving a foreclosure filing. It was followed by fellow California cities Stockton and Modesto, and Cape-Coral-Fort Myers, Fla.

Las Vegas, which had been No. 1 on that list for four-straight months, fell to No. 5. Nevada recently adopted a program that requires mediation before banks can seize a property.

Nationwide, a report Wednesday showed only about 10,000 homeowners received permanent loan modifications this fall under the Obama administration’s mortgage relief plan, more evidence of serious failings in the government’s effort.

Elizabeth Warren, chair of a watchdog panel, told reporters that the program is “not working” and that it had failed to make a dent in the record level of foreclosures. More than 14 percent of homeowners with a mortgage are either late on their payments or in foreclosure, and that number is expected to keep rising as unemployment remains stubbornly high.

The Treasury Department is expected to release updated figures Thursday, but data through October showed that fewer than 5 percent of homeowners who completed the trial periods had their mortgage payments permanently lowered to more affordable levels

Under the program, eligible borrowers who are behind or at risk of default can have their mortgage interest rate reduced to as low as 2 percent for five years. They are given temporary modifications, which are supposed to become permanent after borrowers make three payments on time and complete the required paperwork, including proof of income and a hardship letter.