US home foreclosures on the rise

The number of US homes in some stage of foreclosure more than doubled between April and June from the previous year.

Figures from research firm RealtyTrac showed that one in every 171 US households was in the process of losing their home - up 121% on last year.

There was better economic news from the Commerce Department, with orders for big-ticket US manufactured items growing 0.8% in June.

But much of the bigger-than-expected rise came from big defence orders.
Meanwhile, sales of new homes fell 0.6% in June, also according to the Commerce Department.
It is the seventh fall in the figure in the past eight months.

It means that new home sales are down by 33.2% from a year ago.

Negative equity

Mortgage defaults by US homeowners have surged as millions of sub-prime loans are reset at higher interest rates, and the drop in house prices has pushed more homes into negative equity.
The housing crisis is causing serious problems for the wider US economy.

Almost 740,000 US homes entered the foreclosure process in the second quarter of 2008, according to RealtyTrac.

This includes receiving a default or bank repossession notice or warning of an impending auction.
The worst hit areas were Nevada, California, Florida and Arizona, which had seen the biggest house price rises during the boom years, and the largest volume of sub-prime lending.

But RealtyTrac said most areas of the country were seeing at least some levels of foreclosure activity.

Outlook
California had the most filings - 202,599 - which was up 198% from the same period a year ago.
Some help to homeowners may be available if the US Congress finally passes the housing bill, which aims to help hundreds and thousands of homeowners trapped in unaffordable mortgages.

The bill, if it became law, would allow these borrowers to refinance their mortgages with cheaper, fixed-rate mortgages backed by the government. It cleared the US House of Representatives this week and is expected to be passed by the Senate and signed by George W. Bush in the next few days.

But many analysts believe the housing market has not yet hit rock bottom, and falling house prices could put millions more at risk of foreclosure.

'Hardly thriving'

While the 0.8% growth in orders for durable goods, which are US manufactured items expected to last at least three years, was the highest since February, analysts cautioned against reading too much into it.

"With orders excluding defence falling at a 4% annualised rate in the second quarter, it is pretty clear manufacturing is hardly thriving," said Ian Shepherdson, chief US economist at High Frequency Economics.

Orders for motor vehicles and parts rose 1.8%, which was the strongest for almost a year.
But the increase was only a fraction of the big declines that have been seen in recent months.

"It says things were better than we generally expected as we look back into the second quarter but I think if you look forward into the third and fourth [quarters] the forward-looking indicators are pointing toward some weakness ahead," said Keith Hembre, chief economist at First American Funds.

With prison release, a foreclosure

Former Universal Express CEO Richard Altomare was released from federal prison, but he may not have a luxury condo to live in much longer.

Altomare and his wife, Barbara Altomare, are facing a foreclosure lawsuit on their Highland Beach condo over a $2 million mortgage.

Altomare - who ranked No. 14 on the Business Journal's list of highest-paid CEOs, with about $2 million in compensation at the Boca Raton-based company in 2007 - hasn't broken bread in that condo for several months. He had been housed in a New York City federal prison since May 3.

New York federal Judge Gerard Lynch had ordered Altomare jailed until he paid a $1.7 million judgment disgorgement to the SEC or proved that he could not afford to pay.