A surge of foreclosure filings by 75% in 2007 from a year earlier as the mortgage problems and declines home prices continues to trouble homeowners. The foreclosures, last year reached 2.2 million filings last year. This is more than 1% of the total U.S. households were in some stage of foreclosure during the year, up from 0.58% in 2006.

In December, foreclosure filings went faster 97% from a year earlier. The last quarter of last year has the highest quarterly total among the reports issued by RealtyTrac, Irvine, Calif., a data firm that tracks and reports foreclosure since January 2005.

December was the fifth straight month to have more than 200,000 filings, showing no hopes that the foreclosure filings will slow down.

A total of 642,150 foreclosure filings -- from notices of default to bank repossessions -- were reported in 2007's fourth quarter. That represents a 1% increase from the previous quarter and an 86% boost from the fourth quarter of 2006.

The number of foreclosures is expected to increase steadily through the second half of this year, when the next wave of subprime adjustable-rate mortgages (ARMs) -- the industry's worst-performing loans -- is expected to reset.

Nevada got the nation's highest foreclosure rate for the year, with 3.4% of its households in some stage of foreclosure. This is more than three times the national average. Florida, Michigan, California, Colorado, Ohio, Georgia, Arizona, Illinois and Indiana follow Nevada.

California had the highest number of foreclosure filings. Florida ranked second, followed by Ohio, Texas, Michigan, Georgia, Illinois, Colorado, Arizona and Nevada.

Even with the subprime-mortgage problem, lenders still managed to tighten standards, making it harder for people to acquire credit. In November, Mr. Saccacio said that "given the number of loans due to reset through the middle of 2008 and the continuing weakness in home sales, we would expect foreclosure activity to remain high and even increase over the next year in many markets."
 

A surge of foreclosure filings by 75% in 2007 from a year earlier as the mortgage problems and declines home prices continues to trouble homeowners. The foreclosures, last year reached 2.2 million filings last year. This is more than 1% of the total U.S. households were in some stage of foreclosure during the year, up from 0.58% in 2006.

In December, foreclosure filings went faster 97% from a year earlier. The last quarter of last year has the highest quarterly total among the reports issued by RealtyTrac, Irvine, Calif., a data firm that tracks and reports foreclosure since January 2005.

December was the fifth straight month to have more than 200,000 filings, showing no hopes that the foreclosure filings will slow down.

A total of 642,150 foreclosure filings -- from notices of default to bank repossessions -- were reported in 2007's fourth quarter. That represents a 1% increase from the previous quarter and an 86% boost from the fourth quarter of 2006.

The number of foreclosures is expected to increase steadily through the second half of this year, when the next wave of subprime adjustable-rate mortgages (ARMs) -- the industry's worst-performing loans -- is expected to reset.

Nevada had the nation's highest foreclosure rate for the year, with 3.4% of its households in some stage of foreclosure -- more than three times the national average. Trailing Nevada were Florida, Michigan, California, Colorado, Ohio, Georgia, Arizona, Illinois and Indiana.

California had the highest number of foreclosure filings. Florida ranked second, followed by Ohio, Texas, Michigan, Georgia, Illinois, Colorado, Arizona and Nevada.

Even with the subprime-mortgage problem, lenders still managed to tighten standards, making it harder for people to acquire credit. In November, Mr. Saccacio said that "given the number of loans due to reset through the middle of 2008 and the continuing weakness in home sales, we would expect foreclosure activity to remain high and even increase over the next year in many markets."

Sales of existing homes in the U.S. fell in December. The decline was more than what was forecasted earlier by the National Association of Realtors. The decline in sales of single-family homes was the biggest in 25 years and the first decline in prices since the Great Depression of the 1930’s. Last year was also marked by an entire year of median home price decline, the first time in four decades.

The NAR reported a drop in the sales of single-family homes and condominiums by 2.2 percent in December to a seasonally adjusted annual rate of 4.89 million units.

Sales of single-family homes decreased 2 percent to a 4.31 million pace, the fewest since 1998. Sales of condos and co-ops dropped 3.3 percent to a 580,000 rate.

For the year, sales of single-family homes declined by 13 percent, the biggest fall since a 17.7 percent plunge in 1982. The median price for a single-family home dropped 1.8 percent to $217,000.

The December and Year-end figures highlighted the seriousness of the housing slump which has been has been thump upon after a five consecutive sales records setting years.

Falling property values and stricter borrowing terms will lead to more foreclosures and depress housing for most of this year, economists said. Investors anticipate the Fed will cut interest rates again next week in an effort to prevent the downturn from exacerbating weakness in the broader economy.

``There is likely to be little or no increase'' in gross domestic product this quarter, Harvard University economist Martin Feldstein told the Senate Finance Committee in Washington today. ``The probability of a recession in 2008 now exceeds 50 percent. If it occurs, it could be deeper and longer than the recessions of the recent past.''

While Yun said he expected sales to start to rebound this spring, other analysts said housing is likely to remain in the doldrums throughout most of 2008, reflecting in part the credit crunch, which has caused lenders to tighten their standards, making it harder for prospective buyers to qualify for loans.

The housing slump ``may continue to be a drag on growth for a good part of this year,'' Fed Chairman Ben S. Bernanke testified to the House Budget Committee on Jan. 17.

Policy makers this week cut the benchmark overnight lending rate between banks by three-quarters of a percentage point in the first emergency action since 2001. Futures markets suggest the central bank will probably lower the rate again at the next scheduled meeting on Jan. 29-30.

Mortgage rates are also dropping, making homes more affordable to those able to get financing. The Realtors group's affordability index in November and October was at the highest level in more than two years.

Still, concern that prices will keep falling may continue to keep many buyers out of the market, economists said.

The latest S&P Case/Shiller report showed that the housing market debacle is far from over and is getting worse.

Based on the November home price index in the S&P Case/Shiller Report, the 10-city home price index was down 8.4 percent in November compared to last year’s while the 20-city index also fell 7.7 percent.

The Case/Shiller report is considered to be the most accurate snapshot of prices of homes. It compares same-home sale prices.

The largest year-over-year decline on record was 6.3 percent in April 1991. The November report marked the 11th consecutive month of negative returns for the index, and twenty-four months of decelerating returns.

The worst hit market of the 20 metro areas covered was Miami, where the median home fell a whopping 15.1 percent in value. San Diego prices also fell steeply, down 13.4 percent. Las Vegas was off 13.2 percent and Detroit by 13 percent.

Three cities did emerge with higher prices compared with 12 months ago: Prices rose 2.9 percent in Charlotte, N.C., 1.8 percent in Seattle and 1.3 percent in Portland, Ore. But even these markets have turned down over the last three months. Indeed, every city in the index recorded at least three consecutive months of falling prices through November.

The three biggest U.S. cities also recorded year-over-year declines; New York was down 4.8 percent, Los Angeles 11.9 percent and Chicago 3.9 percent. The losses in Los Angeles accelerated in November; that city recorded the largest month-over-month drop of any index city, 3.6 percent.

Tuesday's report came in the wake of many other surveys indicating that the housing market is getting worse. Foreclosure filings and the risks of future foreclosures were both up sharply; the number of new homes sold plunged more steeply than any year on record; and the pace of existing home sales fell to their lowest level in 27 years.

Standard & Poor's, a credit rating agency, said Tuesday that it is increasing its loss rate assumptions for subprime mortgages which originated in 2006 and packaged in bonds sold to investors.

S&P will now assume a 19 percent loss rate on 2006-vintage subprime loans, compared to previous loss rate assumption of 14 percent. This is due particularly to the cumulative losses from 2006-vintage subprime bonds which increase more than a hundred percent since July 2007.

The adjustment was arrived at as S&P modifies its overall ratings assumptions for reviewing mortgage-backed securities and collateralized debt obligations supported by mortgage-backed securities.

Upon finalizing the adjustments its ratings assumptions, S&P will review all outstanding mortgage-backed debt. Bonds and debt originated in 2005, 2006 and 2007 are likely to be affected the most as they are more sensitive to the current weakening in the market, S&P said in a statement.

Mortgage defaults, particularly in subprime mortgages and home equity products given to customers with poor credit history have risen in the past months. With what is happening S&P is making changes to the assumptions as well.

S&P is also revising its assumptions for excess spread, which is excess capital placed in a deal to cover a portion of losses.