August Foreclosure Filings Highest Since Jan 05

Foreclosure filings rose 36 percent in August from July and 115 percent from a year ago, hit by declines in once-hot housing markets such as California, Nevada and Florida, according to a report released on Tuesday.

RealtyTrac's U.S. Foreclosure Market Report found the number of foreclosure filings in August -- default notices, auction sale notices and bank repossessions -- was 243,947, the highest since it began its monthly report in January 2005, just months before the housing boom peaked.

That translates into one foreclosure filing in August for every 510 households, also a high for the RealtyTrac report.

"The jump in foreclosure filings this month might be the beginning of the next wave of increased foreclosure activity, as a large number of subprime adjustable rate loans are beginning to reset now," James Saccacio, RealtyTrac's chief executive, said in statement.

Will the Federal Reserve rate cut help homeowners who are close to foreclosure? The answer is probably no since many banks have raised their underwriting standards and whatever equity these homeowners had has evaporated with the housing price decline. This will make many of them unable to qualify for any loan.