Ariz. among worst for foreclosures

The number of homes in Arizona possibly headed for foreclosure continued mounting in the second quarter as one in every 70 households received a foreclosure filing, according to the latest data from RealtyTrac.

Arizona foreclosure rate 2.5 times that of U.S.

Arizona posted the nation's third-highest foreclosure rate among all states, behind only Nevada and California. Foreclosure filings were reported on 37,230 Arizona properties, up nearly 36 percent from the previous quarter and nearly four times the number reported for the second quarter of 2007.

"The numbers certainly haven't slowed down, and they don't look likely to get any better at least through the end of the year," said Rick Sharga, RealtyTrac's vice president of marketing. "We're hoping that the (federal) housing bill that the U.S. House and Senate are trying to pass will have some effect on slowing things down ..."

The bill would inject $300 billion worth of loan guarantees, which should allow lenders to take about 500,000 of the worst or most problematic loans off their books and keep about 500,000 homeowners in their houses, Sharga said.

When people hear of skyrocketing foreclosures, they shouldn't picture families losing their houses because they cannot afford their mortgage payments, said Eric Bowlby, president of Amerifirst Financial in Mesa. Many people can afford to pay their mortgages, but are choosing instead to walk away, he said. "People see that the house that they live in is say $50,000 upside down or it's only worth what they paid for it ... and they're seeing that they can go buy the house down the street for a lot less," he said. "So they're buying the house and then they're letting their other house go into foreclosure. You have a bunch of unscrupulous loan officers and a bunch of unscrupulous real estate agents telling people it's a smart thing to do, and they're doing it just to get a commission."

Bowlby said he turns away 30 to 40 homeowners each month who want to buy another house and let their mortgage go into foreclosure.

Nationally, foreclosure filings were reported on 739,714 properties during the quarter, a nearly 14 percent increase from the previous quarter.

"A lot of the issue in Arizona comes down to the fact that there were parts of the state that were overbuilt, and then there were a lot of buyers from out of state that came in and were speculating on the properties as investments," Sharga said.

Top 10 states in second-quarter foreclosure notices:

1. Nevada, one in every 43 households received a foreclosure notice.

2. California, one in every 65 households.

3. Arizona, one in every 70 households.

4. Florida, one in every 78 households.

5. Colorado, one in every 129 households.

6. Ohio, one in every 134 households.

7. Michigan, one in every 137 households.

8. Georgia, one in every 140 households.

9. Massachusetts, one in every 168 households.

10. Illinois, one in every 193 households.

SOURCE: RealtyTrac