By Gerri Elder
More and more American homeowners are facing foreclosure on their homes. It has become a crisis and no one knows when it will end.
RealtyTrac, a national real estate data firm reported that foreclosure filings nationwide in May had increased 90 percent since May 2006.
Foreclosure rates rose 19 percent in one month alone from April to May 2007. These rates are shocking and the highest ever reported by RealtyTrac, which was founded in 1996. Their latest report shows one foreclosure filing per 656 American households during the month of May. That adds up to 176,137 foreclosure actions during the month.
A foreclosure action is a default notice, auction sale notice or bank repossession. Each property considered "in foreclosure" has one or more of these actions against it.
Therefore the number of foreclosure actions doesn't necessarily reflect the actual number of properties in turmoil; however the surge that is reported is accurate and foreclosure filings overall are up by 90 percent.
Homeowners who are facing foreclosure actions on their property may declare Chapter 13 bankruptcy in order to stop all collection actions, including foreclosure. This option allows the back payments to be repaid over a period of time and may allow the homeowner to keep their property.
Home prices are being driven down by the flood of homes back on the market after foreclosure.
With so many homes for sale, prices drop lower and lower causing a decrease in home values overall.
This can lead to more financial problems for homeowners with little equity in their homes who need to refinance out of a subprime or adjustable rate mortgage loan in order to avoid bank foreclosure or bankruptcy.
Subprime lenders who cater to consumers with less than perfect credit are already feeling the sting of the foreclosure crisis and many have already been forced to close their doors.
With default rates continuing to rise there is also concern about the affects on the mainstream lending market and damage to the nation's economy. Some economists believe the worst is over with the housing market situation, while others predict the worst is still to come.
Nevada was once a real estate hot spot and a favorite for investors. It is now, for the 5th month in a row, reporting the highest statewide foreclosure rate in America. The foreclosure rate for the month of May was one in every 166 households which was a 40 percent increase from April and almost five times more than what was reported in May, 2006.
Colorado has the nation's second highest statewide foreclosure rate. There was one foreclosure filing for every 290 households in Colorado during the month of May pushing the foreclosure rate to 2.3 times the national average. The state's foreclosure rate has grown more than 50 percent since May 2006.
Other states reporting high statewide foreclosure rates in May were Florida, Ohio, Arizona, Georgia, Michigan, Indiana and Connecticut.
In May, California had the highest total number of reported foreclosure actions in the U.S. There were 39,659 foreclosure actions filed in California during the month.
Florida and Ohio were also noted as having the 2nd and 3rd highest number of foreclosure actions filed during May. Other states that weren't far behind in the total number of foreclosure actions were Texas, Michigan, Georgia, Illinois, Colorado, Arizona and Nevada.
California currently leads the metro foreclosure rates in the nation. In Stockton, California foreclosure filings increased an incredible 49 percent with 1 foreclosure action reported per 88 households. This rate is nearly 7.5 times the national average.
Other California cities reporting outrageously high foreclosure rates for May were Merced, Modesto, Riverside-San Bernardino, Vallejo-Fairfield and Sacramento.
Homeowners facing foreclosure do have options and not everyone in foreclosure will lose their home, but action must be taken in order to keep the property.
Filing bankruptcy, especially Chapter 13 bankruptcy, is an option that many people do not realize can, in most cases, freeze foreclosure actions instantly.
Many Americans are losing their property during this housing market crisis only because they don't realize that there really are options to help them keep their homes.