Foreclosures Jump 90% Over Last Year

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NEW YORK (Reuters) -- Home foreclosures in May jumped 90 percent from a year earlier, reflecting a poor spring housing market and foreshadowing even higher levels later in 2007, real estate data firm RealtyTrac said Tuesday.
The May foreclosures -- a sum of default notices, auction sale notices and bank repossessions -- totaled 176,137, up 19 percent from April, the firm said in its May 2007 U.S. Foreclosure Market Report.
"After

NEW YORK (Reuters) -- Home foreclosures in May jumped 90 percent from a year earlier, reflecting a poor spring housing market and foreshadowing even higher levels later in 2007, real estate data firm RealtyTrac said Tuesday.

The May foreclosures -- a sum of default notices, auction sale notices and bank repossessions -- totaled 176,137, up 19 percent from April, the firm said in its May 2007 U.S. Foreclosure Market Report.

"After a barely perceptible dip in April, foreclosure activity roared back with a vengeance in May," James Saccacio, chief executive officer of RealtyTrac, said in a statement.

"Such strong activity in the midst of the typical spring buying season could foreshadow even higher foreclosure levels later in the year," said Saccacio. "Certainly not every community nationwide is seeing an increase in foreclosures, but foreclosed properties are becoming more commonplace and adding to the downward pressure on home prices in many areas."

RealtyTrac said there was a national foreclosure rate of one foreclosure filing for every 656 U.S. households during May.

Where the Growth Is -- and Isn't

The default rates in the subprime segment of the U.S. mortgage market, which caters to borrowers with poor credit histories, have jumped in recent months as the housing industry has slowed and prices have fallen.

More than two dozen lenders in the subprime mortgage sector have collapsed as rising defaults drove them out of business during a downturn in the housing market.

Market observers are keeping a watchful eye on the subprime crisis because it has triggered broader concerns that the fallout may spread to mainstream lenders and damage the economy.

A slowing housing market affects homebuilders, such as Centex (down $1.18 to $44.09, Charts, Fortune 500), Hovnanian Enterprises (down $0.86 to $20.31, Charts, Fortune 500) and Pulte (down $0.74 to $24.65, Charts, Fortune 500), as well as banks that make mortgage loans, such as < target="_blank" href="http://money.cnn.com/quote/quote.html?symb=BAC&source=story_quote_link">Bank of America (down $0.39 to $49.66, Charts, Fortune 500) and Wachovia (down $0.65 to $52.95, Charts, Fortune 500).

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