According to RealtyTrac, there were a total of 223,538 foreclosure filings reported in September, up from 112,210 in September of 2006.
Filings were down 8 percent from August’s total of 243,947, though September’s numbers were still the second highest since the company began tracking foreclosures two years ago.
“August was an extraordinarily high month for foreclosure activity, so some falloff was almost predictable,” said Rick Sharga, RealtyTrac’s vice president for marketing.
Though the numbers dipped, Sharga noted that a sequential decline was not likely given the current state of the housing market and the limited financing options available to homeowners.
“We don’t see September as the beginning of the end in this cycle of foreclosures,” Sharga said.
The firm reported a foreclosure rate of one foreclosure for every 557 households, with Nevada, Florida and California being hit the hardest.
Nevada had the highest foreclosure rate, 1 in 185 households, and nearly triple the filings it had in September 2006.
Florida had a foreclosure rate of 1 in 248 households, and more than three times foreclosure filings in September 2006.
California’s foreclosure rate was 1 in 253 households, and a whopping fourfold increase from September of last year.
Michigan, Arizona, Georgia, Ohio, Colorado, Texas and Indiana made up the rest of the top 10 foreclosure states.
It is generally believed that foreclosures will continue to rise as homeowners struggle to refinance out of adjustable-rate mortgages that are currently resetting or due to reset in the near future.
With falling home prices and rising interest rates, many homeowners who relied on teaser rates to manage mortgage payments may find themselves out of luck if lenders don’t take more action to execute additional loan modifications.
Keep in mind that the filings include default notices, auction sale notices and bank repossessions, and some properties may receive more than one notice if the owners has multiple mortgages, though not all default notices end in foreclosure.
Adjustable-rate mortgages worth a record $50 billion are scheduled to reset to higher payments this month, while roughly 1.3 million subprime ARMs are due to reset between now and the end of 2008.