US Nov foreclosure dip is false promise-RealtyTrac

U.S. foreclosure activity dipped 7 percent in November from October, but jumped 28 percent compared with the same month a year ago and will spike without a broad permanent fix for troubled loans in this recession, RealtyTrac said on Thursday. State laws that extend the foreclosure process, loan modification programs and a temporary halt through early January on foreclosures of loans bought by Fannie Mae and Freddie Mac pulled November's filings to the lowest level since June. "I'm afraid we're looking at a bit of a false promise," Rick Sharga, senior price president at RealtyTrac, said in an interview before the figures were released. "It's basically a stay of execution," he added. "I am fearful that we're going to see a pretty significant spike come January." One in every 488 U.S. households got a foreclosure filing last month, according to the Irvine, California-based research firm. Filings include notice of default, auction sale or bank repossession. More borrowers are being forced to delay mortgage payments longer, especially with unemployment leaping and the economy mired in what many economists call a deep recession. Late loan payments rose to a record high in the third quarter, the Mortgage Bankers Association reported last week. Efforts to modify loans tempered the rate that delinquent mortgages tipped into the foreclosure process. But increasing job loss and falling home prices make it likely that foreclosures will swell, the trade group said. Even when mortgage terms have been altered, many borrowers re-default, John Dugan, head of the U.S. Office of the Comptroller of the Currency, said this week. More than half of borrowers whose loans were restructured in the first quarter re-defaulted after six months, he said. The FDIC and Federal Reserve estimate that banks will foreclose on about 2.25 million U.S. homes this year, more than double the 1 million annual rate before the housing crisis. "The frustrating part has been that all the the government programs to date have gone into the system rather than directly to the homeowner," Sharga said. "Most economists are of the opinion that until you stabilize housing, the rest of the economy is not going to get better," Sharga said. "For all the hundreds of billions of dollars that have been injected into the financial system, we still see the foreclosure rates go up." USUAL SUSPECTS A handful of U.S. states stayed at the top of the foreclosure charts in November. These are typically states which had soared the highest during the five-year housing boom earlier this decade and had furthest to fall or have been most severely challenged economically. California, Florida and Michigan posted the highest foreclosure totals while Nevada, Florida and Arizona had the highest rates of foreclosure. Foreclosure activity in Nevada, for example, dropped about 4 percent in November, but held the country's highest foreclosure rate. One in every 76 Nevada housing units got a foreclosure filing last month, more than six times the national average. Cities in California and Florida accounted for nine of the top 10 metro foreclosure rates, RealtyTrac said. Las Vegas was the lone city not in those states. Cape Coral-Fort Myers, Florida had the highest metro foreclosure rate among 230 areas tracked, with one in every 59 housing units receiving a foreclosure filing in November. Keywords: USA HOUSING/FORECLOSURES REALTYTRAC