When the numbers for August foreclosures were reported, it can not be considered as good news especially considering that there were actually 304,000 homes in default. To make this even more depressing, data gathered by RealtyTrac showed that about 91,000 American families lost their homes to foreclosure.

Including all the houses that were repossessed by the mortgage lenders since August last year, there is already a total of 770,000 homes. More can actually be expected as the problems in the credit industry culminated in the bankruptcy filing of Lehman Brothers and rescuing of AIG by the federal government this week.

Foreclosure filings actually include all the stage of foreclosure: default notices, auction notices and lastly, bank repossessions. The number of foreclosure filings last month increased by 12 percent from July and 27 percent from last year during the same period.

Experts consider the year-over-year increase to be conservative but only because August 2007’s foreclosure rate is already considered high. The number of foreclosure filing last month was deemed to be the largest since the online marketing group started tracking and issuing report last January 2005.

For Fannie Mae, the record high numbers are not surprising since they are expecting the foreclosure crisis to bottom out during the last months of the present year. With the national economy suffering another huge blow and the number of unemployed reaching 400,000 every month, it is not surprising that the bottom is much deeper than anticipated.

If some of the states did not pass new legislation that lengthened the waiting period for foreclosure filing, the figures for August could have been much worse. Many state governments have started to get involved in the plight of these distressed homeowners in order to curb the growing foreclosure rate. Lenders in some states are now being required to notify the troubled borrowers regarding the foreclosure filing at least 90 days in advance.

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