Foreclosures Up 25 Percent: RealtyTrac (Helen Chernikoff, Patrick Rucker)

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Foreclosure Map of US

Thu Nov 13, 2:49 am ET NEW YORK (Reuters) – U.S. foreclosure activity in October rose 25 percent from a year earlier, although filings in California fell by double-digit percentage points for the second consecutive month due to a state law slowing the foreclosure process, according to a monthly report by RealtyTrac.

Foreclosure filings -- default notices, auction sales notices and bank repossessions -- rose by 5 percent from September to 279,561 in October, according to Irvine, California-based research firm RealtyTrac.{xtypo_quote_right} Homeowners facing foreclosure who are spending more than 38 percent of their income on mortgage payments could have monthly payments reduced by Fannie Mae and Freddie Mac, the two largest U.S. mortgage finance companies. "The good news is that there are programs and facilities in place that could actually have a material effect of stemming the tide of foreclosures, but as always the devil is in the details," Sharga said, adding that he does not expect to see that effect until late in the first quarter of 2009. {/xtypo_quote_right}

That means one in every 452 U.S. housing units received a foreclosure filing in October, the firm said in its report released on Thursday.

The California law, which requires lenders to contact homeowners and explore options to avoid foreclosure before initiating the process, took effect in early September and drove the state's foreclosure activity rates down, at a pace of 31.6 percent from August to September and 18 percent from September to October.

But in September, the California law helped drive the national foreclosure rate down, something that did not happen in October.