So far, a few metropolitan areas have been able to avoid the surge in foreclosures. One area that has not been so lucky, however, is getting some help from the U.S. Department of Housing and Urban Development.
Foreclosure filings amounted to 517,433 for the top 100 metropolitan statistical areas in the third quarter, with the number of filings increasing from the second quarter for 77 of the areas, according to RealtyTrac's latest Metropolitan Foreclosure Market Report released Wednesday. The report counts at least one or multiple foreclosure actions filed against a property.
Stockton, Calif., had the highest foreclosure rate, with one filing for every 31 homes thanks to the number of foreclosure filings jumping 32 percent from the second quarter to a total of 7,116. Next was Detroit, Mich., with a rate of one for every 33 households, followed by Riverside-San Bernadino, Calif.'s rate of one foreclosure filing per 43 properties, RealtyTrac reported.
To help borrowers in Detroit who are worried about foreclosure and those thinking about buying a home for the first time, HUD announced it will host a free educational homeownership workshop Thursday. The event of almost seven hours will kick off with HUD Secretary Alphonso Jackson discussing several foreclosure prevention initiatives and will hold three different seminars.
The seminars, featuring representatives of lenders, housing counseling agencies, and state and federal housing officials will discuss options available for delinquent borrowers, refinancing options for ARM borrowers who are current on their payments, and information for prospective borrowers. Attendees will also choose to have one-on-one meetings with lenders and housing counselors and can obtain additional information at an exhibitor's hall that will include Chase, Flagstar, Countrywide, National City and other local housing counselors, and public agencies, HUD said.
RealtyTrac reported the remaining worst 10 foreclosure markets belonged to Fort Lauderdale, Fla.; Las Vegas; Sacramento, Calif.; Cleveland; Miami; Bakersfield, Calif.; and Oakland, Calif.
Within the top 25 metro foreclosure rates, California areas accounted for seven, while Florida and Ohio each had five cities.
RealtyTrac noted "there continue to be pockets of the country -- most noticeably metro areas in the Carolinas, Virginia and Texas -- that have thus far dodged the foreclosure bullet."
Greenville, S.C., reported the least number of foreclosure filings, with 79 for the quarter, the McAllen/Edinburg/Pharr, Texas area followed with 106 and Baton Rouge, La., with 147, the announcement.
The highest number of filings -- 31,661 -- was reported by Riverside-San Bernardino, followed by Los Angeles' 29,501 filings and Detroit's 25,708 filings.
Bills.com warned borrowers of the hefty tax debt they can be accountable for if their foreclosed home is worth less than their mortgage. Standard tax rates on cancellation of debt income, or forgiven debt after the sales proceeds of a foreclosed home are applied toward paying off a loan, range from 10 percent to 35 percent. Legal ways to avoid paying taxes on forgiven debt, which is counted as income, include the filing of an IRS Form 982 for individuals who are insolvent at the time of forgiven debt to declare insolvency and have the cancellation of debt waived.