Please ensure Javascript is enabled for purposes of website accessibility

Foreclosure crisis affects more metro areas

LOS ANGELES — The foreclosure crisis intensified across a majority of large U.S. metropolitan areas this summer, with Chicago and Seattle — cities outside the states that have shouldered the worst of the housing downturn — seeing a sharp increase in foreclosure warnings.

California, Nevada, Florida and Arizona remain the nation’s foreclosure hotbeds, accounting for 19 of the top 20 metropolitan areas with the highest foreclosure rates between July and September, foreclosure listing firm RealtyTrac Inc. said Thursday.

Those states saw housing values surge during the housing boom. When it ended, values collapsed and foreclosures soared.

But the latest data show that many metro areas in those states saw a decline in the number of households receiving foreclosure-related filings, while many cities in other states saw a spike.

The Baltimore-Towson metropolitan area ranked 102nd on RealtyTrac’s list. In all, 5,753 properties received a foreclosure filing in the third quarter, or one of every 193 households. That is a decline of 11.3 percent from the second quarter of this year, but an increase of nearly 8 percent from the third quarter of 2009.

“The epidemic is spreading from the states at the ground zero of the foreclosure problems out into areas that hadn’t been previously affected,” said Rick Sharga, a senior vice president at RealtyTrac.

The trend is the latest sign that the nation’s foreclosure crisis is worsening as homeowners facing high unemployment, slow job growth and uncertainty about home prices continue to fall behind on their mortgage payments.

In all, 133 out of 206 metropolitan areas with at least 200,000 residents posted an annual increase in foreclosure activity in the three months ended Sept. 30, RealtyTrac said.

The firm tracks notices for defaults, scheduled home auctions and home repossessions — warnings that can lead to a home’s eventually being lost to foreclosure.

Eleven out of the nation’s 20 largest metropolitan areas saw foreclosure activity increase in the third quarter compared to the same period last year.

The Seattle-Tacoma-Bellevue metro area registered the sharpest annual increase, at 71 percent. One in every 129 households received a foreclosure filing.

The Chicago-Naperville-Joliet metropolitan area posted the second-highest jump, a 35 percent increase. One in every 84 households received a foreclosure notice.

Among other metro areas where foreclosure activity jumped were Houston-Sugar Land-Baytown, up 26 percent; Detroit-Warren-Livonia, nearly 23 percent, and Atlanta-Sandy Springs-Marietta, up 20 percent.

Economic woes, such as unemployment or reduced income, continue to be the main catalysts for foreclosures this year. The U.S. unemployment rate hit 9.6 percent last month.

In the Seattle metro area, unemployment stood slightly lower at 8.5 percent in August and has been edging lower. It was 8.7 percent in August last year.

Still, many troubled homeowners have been unable to hang on. As a result, there’s been no letup in the inventory of foreclosed homes on the market this year, says John Bauer, an agent with ZipRealty in Seattle who represents lenders selling foreclosed properties.

“It has been on an upward trend curve ever since 2008,” Bauer said. “And not just the third quarter of this year, but the last 12 months, it’s been on a steady ascension.”

Chicago also had the third-highest number of homes repossessed by lenders during the quarter, with 12,568. The Phoenix metro area had 14,317 and the Miami metro area 12,963, RealtyTrac said.

Banks have seized more than 816,000 homes through the first nine months of the year and are on pace to seize more than a million.

A controversy stemming from allegations that banks evicted people without reading foreclosure documents wasn’t a factor in the July-September quarter, Sharga said.

Lenders such as Bank of America and Ally Financial’s GMAC Mortgage initially halted foreclosure activity but have since resumed processing foreclosures.

Preliminary data from this month shows almost no change in foreclosure activity versus September, Sharga said.

“We’re not seeing what we might have anticipated in terms of a falloff,” he said.

The Las Vegas-Paradise metropolitan area in Nevada topped the list of metropolitan areas with the highest foreclosure rates in July-September with one in every 25 homes receiving a foreclosure warning, more than five times the national average. But foreclosure filings declined 20 percent from the same quarter last year.

“It’s not out of the woods yet, it’s just less bad than it was a year ago,” Sharga said.

Rounding out the rest of the top 10 metro areas with the highest foreclosure rate were Cape Coral-Fort Myers, Fla.; Modesto, Calif.; Stockton, Calif.; Merced, Calif.; Riverside-San Bernardino-Ontario, Calif.; Miami-Fort Lauderdale-Pompano Beach, Fla.; Phoenix-Mesa-Scottsdale, Ariz.; Bakersfield, Calif., and Vallejo-Fairfield, Calif.