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Foreclosures Rose in 72% of U.S. Cities as Crisis Spread in 2010

Foreclosure filings increased in almost three-quarters of U.S. cities last year as unemployment caused homeowners to default and mortgage distress spread to new regions of the country, according to RealtyTrac Inc.

Notices of default, auction or repossession rose in 72 percent of U.S. metro areas with populations of 200,000 or more, the Irvine, California-based data provider said today in a statement. Among the country’s 20 largest cities, Houston, Seattle and Atlanta had the biggest increases from 2009.

“Deep fault lines of risk remain and could potentially trigger more waves of foreclosure activity in 2011 and beyond,” RealtyTrac Chief Executive Officer James J. Saccacio said in the statement. States where the crisis began -- California, Florida, Nevada and Arizona -- accounted for 19 of the 20 cities with the highest foreclosure rates. Boise, Idaho, ranked 20th.

A national jobless rate of more than 9 percent is increasing loan defaults and cutting home prices as foreclosed properties are sold at a discount. Values dropped 1.6 percent in November from a year earlier in 20 major U.S. metro areas, the biggest annual decrease since December 2009, according to the S&P/Case Shiller home-price index.

The number of U.S. homes receiving a foreclosure filing will jump 20 percent this year as unemployment remains high, RealtyTrac said earlier this month.

The 10 cities with the highest foreclosure rates last year all had fewer filings than in 2009, the company said today. Six of them -- five in California -- also had declines from 2008. Still, filings “remained five to 10 times higher than historic norms in most of those hard-hit markets,” Saccacio said.

Houston Jumps

Among the largest cities, Houston had the biggest jump in filings, up 26 percent. Seattle rose almost 23 percent and Atlanta increased close to 21 percent.

Washington had the largest decrease among big cities, with filings down 22 percent from 2009. Riverside, California, dropped 20 percent and San Diego fell 17 percent. The Los Angeles area was fourth with a 16 percent decline.

Las Vegas had the highest foreclosure rate of any U.S. city, with almost 11 percent of households receiving a filing, nearly five times the national average. A total of 88,198 properties in the metro area got a notice in 2010, down 7 percent from the year before. It was up 31 percent from 2008.

Cape Coral-Fort Myers, Florida, had the second-highest rate at 8.4 percent of households. A total of 30,660 properties got a filing, down 28 percent from 2009 and 25 percent from 2008, according to RealtyTrac.

Modesto, California ranked third at 7.3 percent of households, with filings down from the two previous years. Phoenix was fourth at 7.3 percent and Miami fifth at 7.1 percent.

Decrease in California

California cities Riverside, Stockton and Merced ranked sixth through eighth and Vallejo was 10th, all showing decreases from 2009 and 2008. Orlando, Florida, was ninth, with 6.9 percent of households getting a filing.

The Phoenix area had the most homes repossessed by lenders, with 55,372 properties seized last year, up 17 percent from 2009. Chicago followed at 45,555, up 20 percent, and Detroit was third at 43,541, up 19 percent, RealtyTrac said.

The company tracks default and auction notices and home seizures in records dating to January 2005, and collects data from more than 2,200 counties representing 90 percent of the U.S. population.

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

To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net.

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