From July to September, about 2,622 households received one foreclosure filing or one out of 190 houses. The figures represented a drop of 1.35 percent compared with the second quarter and a 336 percent increase from the same period a year ago.

Birmingham’s foreclosure rate earned the city the 83rd spot in the list of 203 metropolitan areas in the country with high number of distressed properties. Birmingham’s ranking was the highest in all of Alabama and some cities in the Southeast region, including Chattanooga, Columbia, Nashville, Louisville, Raleigh, Knoxville and New Orleans.

On a positive note, Birmingham’s foreclosure rate trailed behind Charlotte, Atlanta, Jacksonville and Memphis. Industry experts said that Birmingham’s repossession rate was high but manageable, considering the impact of the increasing unemployment rate and the sluggish economy.

They pointed out that an area’s high foreclosure rate is greatly influenced by its unemployment rate. They cited the city of Huntsville which is experiencing labor market stability because of the U.S. Base Realignment and Closure which brought in a great number of contractor and military jobs into the city.

The unemployment rate in Huntsville was 7.9 percent last month while its foreclosure rate gave it a ranking of 155 nationwide. The Huntsville ranking was way below Birmingham’s 83rd rank which posted an unemployment rate of 10.2 percent last month.

In other cities in the Southeast region, the foreclosure rate in Charlotte rose to a level that earned the city the 71 spot in the list of cities with high foreclosures. Similarly, Atlanta has been experiencing a rise in its foreclosure rate which earned it the 38 spot. The increase was attributed to its unemployment rate of 10.5 percent and overbuilding problem.

A look at Southeastern cities with low foreclosure rates showed that Nashville ranked 119 in terms of foreclosure rate, a feat attributed to its diversified economy and the city being the seat of Tennessee government.

In Alabama, Tuscaloosa had the lowest number of distressed properties amongst all cities in the state. The city was ranked 190 in the list while Mobile was on the 99th spot and Montgomery on the 44th.

But sometimes, foreclosure brought relief to tenants of distressed properties. That is exactly what tenants of the apartment building Fordham Towers feel. The building’s landlord took out the property from the affordable housing program.

The landlord then sold the building to a group of real estate investors who in turn borrowed heavily to fund the purchase of the building and also another property, the Robert Fulton Terrace.

The acquisition deal was just one of the many similar real estate deals in Bronx and across New York City in which a group of private investors would borrow millions of funds to purchase apartment buildings at prices too expensive if the rents could not be sustained.

When a group of investors took over Fordham Towers, conditions at the apartment building deteriorated. The number of maintenance employees was reduced from nine to three, servicing 168 apartments. The halls were not cleaned, rats proliferated, elevators broke down and tenants were forced to make use of insufficient hot water and heat.

Last May, owners of the apartments defaulted on their loans. This prompted lenders to start the process to put the property on Bronx foreclosure homes listings. The apartment building has joined a flood of similar foreclosures in the area.

In New York City, there are 3,221 apartment units currently in foreclosure. These units were foreclosed after they were bought by private investors and equity firms. According to data released by tenants advocacy group, Urban Homesteading Assistance Board, about 60 percent of foreclosed apartment units are located in the Bronx area.

The group estimates that 11,124 foreclosed apartment units in the city, including 6,635 located in Bronx, are at risk of foreclosure after they were purchased by private investors.

For Fordham Towers tenants, foreclosure brought a pleasant change. The receiver appointed by the court hired a new management and since then, the number of maintenance employees was increased, new security personnel were hired and maintenance and repair were implemented.

In March 2009, a court order stated that several Florida circuits implemented various approaches to effectively manage, deal and process all the foreclosure cases. The court order pointed out that the said task force must develop and recommend procedures, strategies and policies that circuit courts could implement statewide.

According to the task force report, homestead and borrower-occupied properties may obtain a high success rate for loan modification. Additionally, the report developed a fast-track procedure for walk-away or vacant properties. This means that Florida foreclosure homes will be moved immediately through the repossession procedure toward sale and occupancy.

Furthermore, the task force suggested that properties such as tenant-occupied houses be given the option for managed mediation in order to simplify the negotiation between lenders and borrowers.

Meanwhile, the task force report also requires plaintiffs to ask the property occupants whether they know how to contact the property borrower or the landlord that receives the rental payments.

According to industry experts, the task force has made managed mediation mandatory before the final hearing in foreclosure cases. This is to ensure that requirements for both Home Affordable Modification Program (HAMP) and Troubled Asset Relief Program (TARP) are met.

Experts explained that HAMP has been using TARP funds as capped incentives for servicers to encourage them to modify loans. They added that the managed mediation program attempts to assist defendants who are having difficulty contacting the plaintiffs.

According to the task force report, borrowers participating in managed mediation are required to receive certified foreclosure and financial counseling.

Meanwhile, the task force also recommended that all parties involved are not allowed to unilaterally cancel sales of distressed properties that have been set in the court, unless a valid explanation has been given. If the explanation has been accepted, the sale will be rescheduled at an agreed time.

Results of the Consumer Mortgage Audit Centers survey showed that 66 percent of lawyers in Florida believed that many predatory lending and mortgage violations would be tracked by next year. The survey also showed that 64 percent of mortgage violations were not noticed first by homeowners.

Last month, an increasing number of homeowners in Florida were reported defaulting on their mortgage payments, prompting industry experts to fear another flood of foreclosures.

Notwithstanding the rising number of mortgage defaults, indications of recovery were noted in several areas in Florida. In Tampa Bay, the number of foreclosure filings dropped by 14 percent compared with July. The continuing drop in foreclosure filings has been noted for many months this year.

According to industry experts, buyers have been grabbing foreclosure houses which greatly help in slowing down the three-year decline in home prices.

A recently released market data showed that the number of foreclosure cases in Florida increased by 10.5 percent to 62,401 in August from 56,486 total foreclosure filings in July.

More than 50 percent of the foreclosure rate increases were posted in Orlando and its suburban areas while the remaining numbers were shared by Miami and Jacksonville.

Last month, Tampa Bay posted foreclosure filings on 5,180 properties, a drop from July’s 6,767 but higher compared with 5,298 cases filed in August 2008. Month-to-month foreclosure filings also declined in the counties of Hillsborough, Pinellas and Pasco but jumped in Hernando County.

The biggest decline in foreclosure filings were reported in Sarasota-Bradenton and Cape Coral-Fort Myers. These areas started to see their foreclosure home list rose in 2005. Industry experts noted that Florida areas that showed a decline in foreclosure filings are those where buyers flocked to take advantage of deeply discounted foreclosed homes.

Nationwide, the foreclosure activity remained flat for the last two months. However, industry experts feared future rise in foreclosures. One of their concerns that may trigger another flood of foreclosures is the option adjustable-rate mortgage (ARM) with a combined value of $189 billion.

Holders of ARMs have the option to pay less than the standard monthly payment. According to market data, 46 percent of ARMs borrowers are one month or more behind on their mortgage payments. Experts said that over 1 million ARMs are scheduled to reset with high interest payments from now to 2011.

For now, the housing market is enjoying improved sales as first-time homebuyers grab properties on foreclosed home list before the expiration of the $8,000 federal tax credit.

An abandoned foreclosed house is a prime target for vandals, vagrants and other criminal elements. Additionally, vacant foreclosed homes become eyesores that pushed down property values in neighborhoods and present danger to the public health.

Recognizing the negative effects and problems created by foreclosure properties, several cities across the country have initiated maintenance ordinances or programs aimed at eradicating vacant properties in neighborhoods.

Officials in Chula Vista, California launched the Abandoned Residential Property Program which imposed almost $1.4 million fines on servicing agents and lenders. The city’s program mandated that lenders inspect properties they foreclosed to determine if they are occupied or not. Lenders are then required to register a vacant repossessed home and pay the fee of $70. Lenders are then mandated to inspect the foreclosed property at least once a week.

Following the lead of Chula Vista, Stockton also initiated a vacant property policy. Stockton’s program is similar to Chula Vista in terms of requiring lenders to provide maintenance and security on foreclosure houses and to post contact information.

However, Stockton program differs with Chula Vista because it does not require mortgage servicers to register their foreclosed properties. The city relies on residents to report the unmaintained property in their neighborhoods.

The Ohio city of Cleveland has also the same program in place. The city has staff to survey neighborhoods to determine unmaintained foreclosed properties. Officials said that the city has become an expert in determining if a certain foreclosed home is marginally deteriorating or totally abandoned.

However, despite the city’s sophistication in identifying deteriorating distressed properties, Cleveland’s foreclosure problem continues to overwhelm its efforts to alleviate its devastating effects.

In Detroit, Michigan, an estimated $14 million in federal funds will be used by the city to demolish neglected and deteriorating foreclosed homes. The initiative, which is part of the neighborhood stabilization program of the federal government, involves properties purchased through the help of Michigan Land Bank or from Wayne County.

Similarly, the Indiana city of Indianapolis also received federal grants amounting to $29 million from the U.S. Housing and Urban development which will be used to purchase, demolish or rehabilitate foreclosure properties.

In Connecticut, some distressed homeowners found themselves facing foreclosures because they filed for Chapter 13 bankruptcy protection, later refilling for Chapter 7 which means a complete liquidation of debts.

Industry experts said that filing for a Chapter 7 is an easy way out of foreclosures for troubled homeowners. They said filing for bankruptcy should be the last recourse for troubled homeowners.

They pointed out that the Connecticut Judicial Branch has a Web site which allows distressed homeowners to view the status of their foreclosure. Additionally, homeowners can also seek advice from New Britain’s HUD agency.

Industry experts said that many distressed homeowners are not aware of mortgage assistance programs initiated by the Obama Administration to help them avoid foreclosure, including the Home Affordable Modification Program (HAMP).

In New Britain, distressed city homeowners can avail of the Emergency Mortgage Assistance Program which provides monthly foreclosure relief workshops for free. The workshop informs homeowners about changes in the mortgage industry and how these changes can benefit them.

Furthermore, counselors under the program also help homeowners communicate with their lenders to work out favorable solutions to their foreclosure problem.

New Britain’s Neighborhood Housing Services (NHS) foreclosure intervention counselors advise homeowners to contact their lenders as early as possible. They told homeowners not to ignore letters from their lenders, to open and read them and respond to them appropriately.

They said that if homeowners have difficulty communicating with their lenders, they should try to approach the NHS immediately or other reliable agencies.

NHS counselors said that homeowners who could not afford to pay their mortgage should opt for foreclosure sale. They said that some homeowners are better off selling their properties, especially if the worth of these houses is beyond their means to pay to begin with.

However, homeowners who chose to sell their distressed properties still need assistance in locating the right resources. NHS counselors cited New Britain’s Human Resources Agency (HRA) which provides funding for security deposits and makes available a list of landlords who are looking for tenants.

However, the climbing unemployment rate is causing concern among industry experts who feared that many people who lost their jobs may soon have difficulty making their mortgage payments, thus pushing the number of REO property to rise again.

In May, 582 foreclosure actions were reported, representing a decline of 58.6 percent from the 1,405 recorded during the same month last year. Last month’s figures were 24.3 percent lower from the previous month.

Statewide, foreclosure deeds recorded were down in numbers by 26.3 percent or 4,110 from 5,576 for the same period a year ago. Industry experts noted that last month’s recorded numbers of foreclosure deeds were the lowest since the April 2007 figures.

But with the growing rate of unemployment in Massachusetts, industry experts fear that those who lost their jobs will struggle with their monthly mortgage payments and push foreclosures to rise again.

Still, other industry experts attributed the decline in the number of REO property to the Massachusetts Land Court’s decision in March which invalidated two foreclosure actions because lenders involved failed to provide proof that they were the true holders of the titles to the distressed properties.

The Massachusetts Land Court’s decision had caused concerns to ripple throughout the real estate industry and prompted some lenders and banks to stall sales of repossessed homes.

Director of litigation at Harvard Law School’s WilmerHale Legal Services Center Paul Collier noted that some title companies are hesitating at insuring property titles in repossession sales because of pending litigations.

He explained that many homebuyers are having difficulty getting financing because lending institutions could not provide titles to foreclosure sales. He added that some lenders who want to hold foreclosure auctions could not attract buyers at those events.

Meanwhile, petitions for foreclosure increased significantly last month, in sharp contrast to the decline in the number of foreclosure deeds. The 2,329 filings of foreclosure petitions were almost six times higher than the 390 petitions recorded for the same period the previous year.

Harvard University’s Joint Center for Housing Studies director Nicolas Retsinas pointed out that whatever is the reason for the decline in the number of REO property, the fact remains that foreclosure is not yet over.

Community Development Director Shannon Meadows said that the funding is a big help in addressing the needs of neighborhoods severely affected by the unabated increase in the number of bank REO properties.

One housing recovery program in the city involves a budget of $850,000 to purchase, rehabilitate and re-sell abandon and vacant foreclosed properties in Southgate and Highlands areas. These bank REO properties were repurchased by banks at sheriff’s auctions. Under the program, foreclosed properties will be purchased only from banks.

The program requires that eligible buyers should have good credit standing, must bring with them $1,500, secure a loan from the bank and have earnings of $72,250 for a household of four and $50,550 for individual.

Typically, buying bank REO properties requires at least 2.5 percent down payment. However, potential homebuyers should prepare to shell out more. Springfield can help potential homebuyers procure as much as $20,000 for closing costs and down payment.

Bank REO properties will be sold based on their purchase and rehabilitation costs. Proceeds from the sale will be used to buy and rehabilitate other bank REO properties.

Another program aimed at reducing the number of foreclosed houses in the city offers eligible homebuyers an opportunity to borrow money directly from the city of Springfield. Additionally, foreclosed houses will be rehabilitated to make them energy-efficient. In line with this, workshops will be conducted to educate homeowners on energy efficiency.

Springfield housing program coordinator Jackie Sudhodd said that landscapes will be improved to make repossessed homes attractive to potential homebuyers. She said that the goal is not just to make distressed properties pass code but to make them marketable.

Meanwhile, Meadows pointed out that making foreclosed homes livable will greatly improve conditions in neighborhoods severely affected by the foreclosure crisis. She added that the longer these repo homes remain unsold on the market, the more expensive it is to rehabilitate them.

One out of 160 houses in Ohio is at risk of becoming bank REO properties in the first quarter of 2009, making the state the 11th highest nationwide in terms of foreclosure rate.

Real estate market experts believed that the enhanced version of the Making Home Affordable program would help alleviate Southwest Florida’s troubled homeowners’ anxieties over the thought that they could lose their properties to foreclosure.

The enhanced version of the program focuses on the use of short sale as a means to avoid foreclosed houses. Short selling means the sale of distressed properties at a price that is worth less than the total debt owed by borrowers to their lenders.

The original version of the program offered incentives only to lenders who successfully modified terms of the loans of troubled borrowers. The enhanced version offers as much as $1,000 incentives to lending institutions who allow short selling and about $1,500 to borrowers for relocation costs.

Florida Gulf Bank’s senior vice president Doug Thrasher explained that the aim of the program’s enhanced version is to provide more incentives to encourage lenders and troubled homeowners to find ways to avoid foreclosures. However, short selling may help troubled borrowers avoid foreclosures but it would not protect their credit scores from damage.

Aside from short selling, the enhanced program also encourages the deed in lieu of foreclosure option which means homeowners transfer their properties’ title to lenders. However, some real estate experts are questioning how the new incentive program would make it feasible for homeowners to transfer ownership of their properties to lenders when many borrowers in Southwest Florida have first and second loans with different lenders.

Statewide, the number of foreclosure filings in Florida increased by 36 percent in the first quarter of this year, affecting almost 119,220 properties. These figures represented a 12 percent slide from the last quarter of 2008 but it also meant a 36 percent jumped from the first quarter the previous year.

Meanwhile, Florida’s foreclosure rate ranked fourth nationwide in the first quarter of this year. For the first quarter, Lee County in Southwest Florida registered the highest foreclosure rate in the state during the period, with one per 26 homeowners receiving filings and putting their properties in danger of turning into foreclosed houses.

On the case of higher mortgage defaults and foreclosed houses, experts blamed banking requirements under the Community Redevelopment Act (CRA) which resulted to poor lending practices and underwriting standards.

With unemployment on the rise, compounded with mortgage defaults and restrictive foreclosure time table, minority borrowers have become the poster children of the foreclosure crisis.

The growing number of foreclosed homes is especially evident in minority communities of Arizona, California and Nevada.

These states have experienced the most severe slump in home prices and they carry the most number of Hispanic American families compared to other states in the country.

It has been the usual practice of banks to target first-time homebuyer minorities who were eager to invest in properties to join the middle class. Hispanic Americans and African Americans were the favorites of banks such as Bank of America to convince to deposit in a category where only about 2 percent of the community used traditional banking institutions for saving and checking accounts.

The minorities were enticed by banks by offering preferred CRA programs. The law allowed banking institutions to lower entry requirements. This is followed by the issuance of a slew of subprime loans to minorities who have limited understanding of risks involved in adjustable loan because of the language barrier.

A series of events led to the crash of subprime loans resulting to more and more foreclosed homes in ethnic communities.

Another factor being blamed for the rising number of foreclosed homes is the foreclosure laws’ timing requirement. The traditional foreclosure process requires not less than 90 days from the issuance of notice of mortgage default to the listing and sale of distressed properties.

Distressed homeowners are given a grace period from 60 to 90 days to allow them to restore their loans before proceedings for foreclosure commence.

Meanwhile, experts agree that foreclosure rates will continue to soar in the coming months as more and more jobs are being let go, resulting to an increasing number of distressed homeowners who have lost the ability to refinance their loans or meet their monthly mortgage payments.

And sadly, a great number of Hispanic Americans and African Americans are still expected to be added to the growing list of foreclosure victims.