Home foreclosures increase 72%
Bloomberg News Published April 25, 2006
IRVINE, Calif. -- Mortgages entering foreclosure jumped 72 percent during the first quarter from a year earlier, as higher interest rates increased monthly payments and strained the budgets of homeowners with adjustable-rate loans.
Lenders began foreclosing on 323,102 mortgages, a ratio of one in 358 U.S. households, according to a report issued Monday by RealtyTrac Inc. Banks typically start foreclosing on mortgages after payments are 90 days late.
"When you couple the higher bills that people with adjustable loans saw with the higher-than-expected energy costs, you see a lot of homeowners stretched beyond the point where they could make their payments," said Rick Sharga, a RealtyTrac vice president.
Homeowners who would otherwise sell their houses to pay off their loans face a weaker market, he said.
Sales of existing homes fell to 6.71 million at an annualized rate in the first quarter from 6.94 million in the last three months of 2005, according to Fannie Mae, the nation's largest mortgage buyer.