More than 50,000 homes lost in October; Foreclosure rates expected to rise in 2008 as adjustable-rate mortgages reset.

Foreclosure filings for October rose 2% from September and 94% from a year ago. This nearly doubled and more people could lose their homes in 2008, according to a report released Thursday by RealtyTrac.

According to RealtyTrac Inc., default notices for October dropped nearly 9% from a year ago. But foreclosure activity in general appears to have "leveled off" since peaking in August, a foreclosure-listing service said.

Realty Trac Chief Executive James J. Saccacio said "Some of the efforts on the part of homeowners, lenders and advocacy groups to find alternatives to foreclosure may be starting to have an impact," He added, however, that bank repossessions were up by almost 35% for the month, an indication that more homeowners who enter the foreclosure process are losing their homes.

Homeowners who were forced out of homes repossessed by the banks were 53,609, more than doubled from a previous year’s 20,768, the firm said. Through October, a total of 309,557 homes have been repossessed by banks leading to forced evictions.

"Some people are in over their heads, owing more than what they can sell their house for," said RealtyTrac spokesman Daren Blomquist.

For the full year, RealtyTrac expects that 2 million homes to have entered the foreclosure process - including bank repossessions, default notices and auction sale notices.

Blomquist said that foreclosures could hit homeowners even harder in the beginning of 2008. Homeowners experiencing trouble in the fall may not see a foreclosure notice until the January or later, he added.

Higher interest rates and weaker home values have hit many homeowners hard, especially those with higher-risk subprime mortgages. Lenders, in turn, have tightened standards, making it tougher for individuals and companies to obtain credit.
Two weeks ago, RealtyTrac reported that third-quarter foreclosure filings surged 30% nationally from the second quarter and nearly doubled from a year earlier, with one foreclosure filing for every 196 U.S. households. At the time, 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."

"The other side of the vise pressing on these people is that it's harder to refinance because lenders' standards are tighter," Blomquist added.

The national foreclosure rate for the month was one filing for every 555 households.

Foreclosure activity is reported state by state, based on filings at the county level; there is no federal clearinghouse for the data. Because there are often multiple filings in the foreclosure process, some critics have complained that RealtyTrac’s data overstates the severity of the pace of foreclosures.

The overall trend is confirmed by Foreclosures.com, another Web site that collects foreclosure data, which reported that pre-foreclosure filings were up 11 percent in October from the previous month and nearly double the pace a year ago.

The rising number of foreclosures is adding more unsold homes to an already glutted housing market. The National Association of Realtors reported Wednesday that sales of existing homes fell for the eighth consecutive month in October, with median home prices falling by a record amount.

Sales of existing single-family homes and condominiums dropped by 1.2 percent, while the median price of a home declined to $207,800, a drop of 5.1 percent from a year ago. That's the biggest year-over-year price decline on record.