August Foreclosure Filings More Than Double

Foreclosure filings were up 36% in August from July and 115% from last year, according to RealtyTrac's U.S. Foreclosure Market Report, released Tuesday. The filings, which include default notices, auction sale notices and bank repossessions, reached 243,947, the highest since RealtyTrac began recording the figure in January 2005. "The jump in foreclosure filings this month might be the beginning of the next wave of increased foreclosure activity, as a large number of subprime adjustable rate loans are beginning to reset now," said RealtyTrac CEO James Saccacio. The states with the top three foreclosure figures were Nevada, California and Florida. Six Californian cities were among the ten metropolitan areas with the highest foreclosure rates, with Modesto leading the country with one foreclosure for every 79 households. "This is just the beginning of a wave of new foreclosures," said RealtyTrac's EVP for marketing Rick Sharga. "There are lots of people who bought homes they could only afford at the teaser rates, and now have very few options." The Fed lowered the benchmark fed-funds rate Tuesday by a half-point to 4.75%, arguing that the "tightening of credit conditions has the potential to intensify the housing correction and to restrain economic growth."

Sources: Wall Street Journal, MarketWatch, Reuters, Bloomberg
Commentary: Fed Cuts Key Rates by 50 Points; Will Act as Needed • Is It Time to Hedge Your House? • U.S. Foreclosures Surge • Foreclosure Threat Ominous for Subprime Borrowers
Stocks/ETFs to watch: XHB, ITB, IYG, XLF

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