Home Foreclosures Double In 2nd Quarter

Home foreclosure filings more than doubled in the second quarter of 2008 from a year ago, according to real estate data released Friday by RealtyTrac Inc.

Nationwide, 739,714 households — one in every 171 — received at least one foreclosure-related notice from April to June, as soft housing sales, declining home values, tighter lending standards and a sluggish U.S. economy left many homeowners with few options.

Nevada, California, Arizona and Florida continued to have the highest foreclosure rates. One in every 43 Nevada households received a filing during the quarter.

Cities in California and Florida accounted for 16 of the 20 worst metro foreclosure rates. Stockton, Calif., had the worst rate, with one in every 25 homes in the town receiving a foreclosure filing.

Economists estimated 2.5 million homes nationwide will enter the foreclosure process this year, up from about 1.5 million in 2007.

The latest numbers come as Congress is considering a housing rescue bill that would aid struggling homeowners and provide liquidity for mortgage giants Freddie Mac and Fannie Mae.

Also on Friday, the government released data showing sales of new homes fell in June for the seventh time in the past eight months. The Commerce Department reported that sales of new single-family homes dropped by 0.6 percent to a seasonally adjusted annual rate of 530,000 units, following a 1.7 percent fall in May.

Understanding The Housing Bill

The Senate is expected to clear a sweeping housing bill Saturday and send it to the president for his signature. The legislation would address the home-foreclosure crisis and shore up the government-sponsored mortgage giants Fannie Mae and Freddie Mac. The House passed the bill Wednesday by a vote of 272-152.

A look at what the bill would do:

— Give the Treasury Department the power to extend Fannie Mae and Freddie Mac an unspecified line of credit and to buy their stock, if necessary, to prop up the mortgage companies. The two companies back or own $5 trillion in U.S. mortgages — nearly half the nation's total.

— Allow qualified homeowners facing foreclosure to apply for lower fixed-rate, 30-year mortgages backed by loan guarantees from the Federal Housing Administration. The original lenders would have to agree to take a loss on their loans.

— Create an independent regulator to oversee Fannie Mae and Freddie Mac. The regulator could establish minimum capital requirements for the two companies and limits on their portfolios. It would also have approval power over the pay packages of Fannie Mae and Freddie Mac executives.

— Provide $3.9 billion in grants to communities with the highest foreclosure rates to buy foreclosed and abandoned properties.

— Give about $15 billion in housing tax breaks, including a credit of up to $7,500 for first-time homebuyers who bought homes between April 9, 2008, and July 1, 2009.

— Put a cap of $625,500 on the loans Fannie Mae and Freddie Mac can buy in certain high-priced areas, and a cap in other areas of up to 15 percent above the median home price.

— Count any federal infusion for the mortgage giants under the debt limit, essentially capping how much the government could spend to stabilize the companies without further approval from Congress. As of Tuesday, the national debt that counts toward the limit stood at about $9.5 trillion, roughly $360 billion below the statutory ceiling.

Material from The Associated Press was used in this report.

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