Foreclosures Rise, But CRE Loans Perform

IRVINE, CA-Foreclosures zoomed by 30% during the third quarter and doubled from the third quarter last year, according to a new report released today, but another report shows that commercial real estate loan defaults remain low. The two newly released reports, one by locally based RealTrac and the other by the California California Mortgage Bankers Association, provide a glimpse into what industry experts call the mixed signals that the US economy is generating.

The latest RealtyTrac report shows 635,159 foreclosure filings on 446,726 properties in the US during the third quarter, a rate of one foreclosure filing for every 196 US households. The Mortgage Bankers Association report shows that the state’s commercial loan delinquency ratio stood at .04%, marking the 36th consecutive quarter in which the delinquency ratio remained below a half of a percentage point.

“August and September were the two highest monthly foreclosure filing totals we’ve seen since we began issuing our report in January 2005,” says James J. Saccacio, chief executive officer of RealtyTrac. With foreclosures increasing in 45 out of 50 states in the third quarter, and given the number of loans due to reset through the middle of 2008, “We would expect foreclosure activity to remain high and even increase over the next year in many markets,” Saccacio says.