Bank repossessions up 90% in January; $460 billion in adjustable mortgages to reset this year
 

(Bloomberg)—Bank seizures of U.S. homes almost doubled in January as property owners failed to make higher payments on adjustable-rate mortgages.

Repossessions rose 90% to 45,327 last month from the same period a year ago, RealtyTrac Inc. said today in a statement. Total foreclosure filings, which include default and auction notices as well as bank seizures, increased 57%.

“The most troubling thing is that we are seeing more and more of these properties actually going all the way through the process and going back to the banks,” Rick Sharga, executive vice president of RealtyTrac, said in an interview.

Defaults among subprime borrowers and those unable to meet rising payments on adjustable-rate loans drove foreclosure filings to the highest since August and the second-highest since RealtyTrac started keeping records. About $460 billion of adjustable mortgages are scheduled to reset this year, raising minimum payments for borrowers, according to analysts at Citigroup.

More than 233,000 properties were in some stage of default last month. Total foreclosure filings increased 8% in January from December, RealtyTrac said.

Nevada, California and Florida recorded the highest foreclosure rates among the 50 states, said RealtyTrac, a seller of U.S. foreclosure statistics with a database of more than 1 million properties.

The rate of foreclosure filings in Nevada continued to lead the nation, with 6,087 properties in default or having been repossessed. That’s 95% more than in January 2007 and 45% less than in December.

California had the highest total number of default and foreclosures with 57,158 properties facing possible seizure last month. That was more than double the year-earlier figure and was up 7% from December.

Florida had the second-highest number of homes in default or foreclosure with 30,178 in January, more than double the figure for the prior year and 3% less than in December.

Arizona, Colorado, Massachusetts, Georgia, Connecticut, Ohio and Michigan rounded out the top 10 states worst off in terms of missed payments and property seizures, RealtyTrac said.

Cape Coral-Fort Myers, Florida, had the highest January foreclosure rate among 229 metropolitan areas. Stockton, California, had the second highest, followed by the Riverside- San Bernardino area.

New Jersey ranked 18th in terms of the proportion of households at some stage of default or seizure, with 1.5%. New York was 30th with 0.6% of households facing possible foreclosure.

U.S. home prices fell last year for the first time since the Great Depression. That made it more difficult for homeowners to sell or refinance properties encumbered by mortgages that may be higher than the value of the houses themselves. Sales of existing homes fell last month to the lowest in at least nine years, the National Association of Realtors said yesterday.

The median price of an existing home fell 4.6% to $201,100 from January 2007. The median for a single-family home dropped 5.1% to $198,700, and condominium and co-op prices fell 1% to $220,400.

Banks may be forced to resell as many as 1 million foreclosed properties this year, adding to a glut of inventory and forcing prices down even further, Mr. Sharga said.

January was the sixth straight month with more than 200,000 foreclosure filings, RealtyTrac said. The fourth-quarter total of 642,150 filings was the most since the company began records in January 2005. More than 1% of U.S. households were in some stage of foreclosure during 2007.