MORTGAGE WOES

More can't pay for their homes
Foreclosure numbers in U.S. continue to surge.

The number of foreclosure filings reported in the U.S. last month more than doubled compared with August 2006 and jumped 36 percent from July, a trend that signals many homeowners are increasingly unable to make timely payments on their mortgages or sell their homes.

A total of 243,947 foreclosure filings were reported in August, up 115 percent from 113,300 in the same month a year ago, Irvine, Calif.-based RealtyTrac Inc. said Tuesday.

There were 179,599 foreclosure filings reported in July.

The filings include default notices, auction sale notices and bank repossessions. Some properties might have received more than one notice if the owners have multiple mortgages.

August's total represents the highest number of foreclosure filings reported in a single month since the company began tracking monthly filings two years ago.

The national foreclosure rate last month was one filing for every 510 households, the company said.

''The jump in foreclosure filings this month might be the beginning of the next wave of increased foreclosure activity, as a large number of subprime adjustable rate loans are beginning to reset now,'' RealtyTrac chief executive James Saccacio said.

The mortgage industry has been rocked by a surge in defaults, particularly among borrowers with subprime loans and adjustable rate mortgages that initially had attractive ''teaser'' interest rates but then can adjust upward, resulting in a payment shock.

Many of the loans, some of which adjust in as little as two years, were issued in 2005 and 2006 during the height of the housing boom.

Lagging home sales and flat or decreasing home prices have also left homeowners unable to make their mortgage payments hard-pressed to find buyers.

The latest figures also reflect an increase in the number of homes going into foreclosure that are not being picked up in estate sales and are ending up going back to lenders.

The number of bank repossessions jumped to 42,789 in August, compared with 20,116 a year earlier, the RealtyTrac said. In July, there were 26,842 bank repossessions.

Nevada, California and Florida had the highest foreclosure rates in the country last month, the firm said.

Also Tuesday, struggling homebuilder Beazer Homes USA Inc.'s chief executive, Ian McCarthy, said the company is cutting costs and offering discounts to weather the downturn in the housing market and is prepared to downsize further if needed.

McCarthy told investors at a conference in New York that was broadcast on the Internet that the Atlanta-based company knows the landscape has changed and it must deal with the hard realities it faces.

Beazer has been ''rightsizing'' its business by cutting costs and centralizing functions, McCarthy said.

''If we have to rightsize that further, if we have to shrink that further ... we will be prepared to do that,'' he said.

Beazer, which has a substantial presence in the Charlotte market, has faced difficulties in the marketplace as well as internally with investigations into company practices.

Beazer recently disclosed that its former chief accounting officer may have inflated reserves and other accrued liabilities in earlier periods. The discrepancies surfaced during an independent internal investigation of the company's mortgage origination business.

The Observer has reported, in articles since March, that Beazer's operations in the Charlotte area sometimes violated federal laws and regulations. The Observer found the company's aggressive sales practices contributed to a high rate of foreclosures in many of its local developments. In response, the FBI and other federal agencies launched investigations. Beazer's board of directors then announced its own investigation.

Beazer has said it has followed the law and is cooperating with the inquiries.