Foreclosure rate in Utah jumps more than 113%

Utah ranked 14th in the nation in the rate of foreclosure filings in the second quarter of this year, up from 18th during the first quarter, according to a report released Thursday.

One in every 226 households in Utah was in foreclosure during the second quarter of 2008, up just over 21 percent from the first quarter of the year and more than 113 percent higher than the same period last year, said the report from RealtyTrac, based in Irvine, Calif.

Among the state's metro areas, St. George had the highest rate, with one in every 87 households in foreclosure. The St. George area saw filings jump 446 percent year-over-year and 56 percent from the first quarter of 2008 to the second quarter, the report said.

The Provo/Orem area had the second-highest foreclosure rate among Utah cities. One in every 163 households was in foreclosure, an increase of 41 percent from last quarter and a 351 percent increase in filings when compared with the second quarter of last year.

In Salt Lake City, the foreclosure rate was one in every 217 households. That was a 17.16 percent increase over the rate for the previous quarter and an 89.29 percent jump from the second quarter of 2007. Salt Lake's foreclosure rate ranked 52nd among the nation's 100 largest metro areas, the report said.

Salt Lake-area real-estate broker David Seiler with ReMax Associates said the increase in foreclosures is giving prospective buyers even more selection to choose from, which he said is helping to force home prices down in many areas.

Because of the poor loans made by numerous financial institutions, some borrowers are in the process of deciding whether to try to work out a solution with their bank to avoid losing their house or just walking away, he said.

"The banking industry was stupid," Seiler said. "We're starting to see the ramifications all over the place."

Seiler said he expects to see home prices continue to adjust downward.

"If it doesn't start to pick up in August, then we're going to start to see people start to lower their prices," he said. "They don't want to go into fall and winter and not sell, if they don't have to."

The one bright spot for Utah in the foreclosure report was the Ogden/Clearfield metro area, where foreclosure filings fell 14 percent in the second quarter, compared with the first three months of the year. One in every 283 households were in foreclosure in the second quarter. The filings increased a modest 8 percent when compared with the second quarter of 2007.