If you're worried about credit quality, RealtyTrac's
August foreclosure figures won't give you any solace. In a word, they were ugly. Some details ...
* Foreclosure filings soared 115.3% year-over-year in August -- to 243,947 from 115,292 in the same month of 2006.
* Measured from July's reading of 179,599, filings surged 35.8%.
* If you look at filings per household, Nevada performed the worst. One in every 165 households there is in foreclosure. Other standouts include California (1 in 224), Florida (1 in 243), and Georgia (1 in 271).
August wasn't a pretty month for homeowners, with foreclosures more than doubling from a year ago. The problem? Tighter mortgage markets are cutting off refinancing opportunities for borrowers with re-setting ARMs and subprime loans. While they might have been able to refi their way out of trouble 12 or 18 months ago if they fell behind on their payments or faced an imminent reset, that's no longer the case for many borrowers. Slumping prices are also leaving more borrowers upside down, giving them an incentive to walk away in times of financial trouble. Bottom line: Until the underlying housing market finds its footing -- and the mortgage markets loosen up again -- we're going to continue to see delinquencies and foreclosures rise.