Oct. 28 (Bloomberg) -- Las Vegas had the highest U.S. foreclosure rate in the third quarter, followed by cities in California and Florida, as unemployment left more borrowers unable to make their mortgage payments, RealtyTrac Inc. said.

The largest increases in home loan defaults came in metropolitan areas where foreclosures hadn’t been a “focal point” previously, the Irvine, California-based seller of default data said today in a report.

“Rising unemployment and a new variety of mortgage resets continued to gradually shift the nation’s foreclosure epicenters,” James Saccacio, RealtyTrac’s chief executive officer, said in the statement. Alt-A mortgages, often made without documenting a borrower’s income, are “spreading the foreclosure flood,” he said.

The pace of prime and alt-A loan defaults is accelerating as subprime defaults slow, Standard & Poor’s said in an Oct. 13 report. More than $400 billion in U.S. home mortgages that were packaged into securities and sold by companies other than government-supported Fannie Mae and Freddie Mac are in default and may be foreclosed on, S&P said. Those defaults may depress home prices for years, the analysts said.

The sharpest increases in foreclosure activity among the 50 metropolitan areas with the highest rates were in Boise City, Idaho; Salt Lake City and Provo-Orem, Utah, RealtyTrac said. Foreclosure filings more than doubled in all three areas.

New Hot Spots

New “hot spots” developed in Chico, California, where the foreclosure rate almost doubled, and Reno, Nevada, where the rate rose 80 percent from a year earlier, RealtyTrac said. The rates increased 77 percent in Prescott, Arizona; 64 percent in both Jacksonville, Florida, and Rockford, Illinois; and 41 percent in Lansing, Michigan, RealtyTrac said.

In areas where the rate fell, such as parts of inland California, it was probably because of lenders delaying foreclosures or “servicers ramping up modification programs and continuing to see who may qualify,” Thomas Lawler, founder of Lawler Economic and Housing in Leesburg, Virginia, said in an interview.

“In California, the boom and bust was earlier and much more intense,” Lawler said. “There are other parts of the country that aren’t nearly as far along in the process.”

Las Vegas led the nation, with 5.13 percent of households receiving a foreclosure filing, almost seven times the national average. Filings rose 54 percent from a year earlier, according to RealtyTrac.

Cape Coral

Merced, California, had the nation’s second-highest rate, with 3.72 percent of households receiving a filing. The number there dropped 11 percent from the third quarter of 2008.

Cape Coral-Fort Myers, Florida, ranked third with filings going to 3.67 percent of households and the number of filings down 2 percent. Stockton, California, was fourth with a rate of 3.53 percent of households receiving a filing and the number falling 3 percent. Modesto, California, recorded a rate of 3.39 percent, or little changed.

Three California cities were sixth through eighth: Riverside-San Bernardino, California; Bakersfield; and Vallejo- Fairfield.

Reno was ninth and Port-St. Lucie, Florida was 10th, with filings climbing 40 percent, according to RealtyTrac.

Los Angeles ranked 23rd with 1.58 percent of households receiving a filing. The number of filings there rose 32 percent. New York ranked 138th with less than 1 percent of households in default or foreclosure.

RealtyTrac collects data from more than 2,200 counties representing 90 percent of the U.S. population. It compiles foreclosure filings including default and auction notices and bank seizures.

To contact the reporter on this story: Dan Levy in San Francisco at dlevy13@bloomberg.net.

Last Updated: October 28, 2009 12:06 EDT