With the rising unemployment more homeowners are falling into foreclosure. Foreclosure wise more than 5 percent in the July-September quarter when about 938,000 properties were affected compared to the 890,000 in the previous quarter.

This was according to a report released by RealtyTrac, Inc. an Irvine, California-based real estate listing company. With that, foreclosure pace, it is foreclosure is expected to hit 3.5 million this year compared to last year’s 2.3 million.

Seen as the main reason, unemployment rate is now at a 26-year high of 9.8 percent and is still expected to rise till mid next year.

"The sheer scale of the problem is preventing the loan modification programs from having the kind of impact we'd all like" said Rick Sharga, RealtyTrac's senior vice president for marketing.

It was the seventh-straight month in which more than 300,000 households received a foreclosure filing. This includes default notices, auction and bank repossession and several other legal notices that homeowners receive before they finally lose their homes.

Banks repossessions came to nearly 88,000 homes in September which is up from the 76,000 homes repossessed in the previous month.

The State of Nevada had the nation's highest foreclosure rate in the July-September quarter, followed by Arizona, California, Florida and Idaho.

Also included in the top 10 were Utah, Georgia, Michigan, Colorado and Illinois.