2011 may become worst year in foreclosure crisis
Share with others:
NEW YORK -- The bleakest year in the foreclosure crisis has only just begun.
Lenders are poised to take back more homes this year than any other since the U.S. housing meltdown began in 2006. About 5 million borrowers are at least two months behind on their mortgages and more will miss payments as they struggle with job losses and loans worth more than their home's value, industry analysts forecast.
Rick Sharga, a senior vice president at foreclosure tracker RealtyTrac Inc., said, "2011 is going to be the peak." The firm predicts 1.2 million homes will be repossessed this year by lenders.
The outlook comes after banks repossessed more than 1 million homes in 2010, RealtyTrac said Thursday. That marked the highest annual tally of properties lost to foreclosure on records dating to 2005.
One in 45 U.S. households received a foreclosure filing last year, or a record high of 2.9 million homes. That's up 1.67 percent from 2009.
For December, 257,747 U.S. homes received at least one foreclosure-related notice. That was the lowest monthly total in 30 months. The number of notices fell 1.8 percent from November and 26.3 percent from December 2009, RealtyTrac said.
The pace slowed in the final two months of 2010 as banks reviewed their foreclosure processes after allegations surfaced in September that evictions were handled improperly. Under increased scrutiny by the government, lenders temporarily halted taking actions against borrowers severely behind on their payments.
However, most banks have since resumed their eviction processes, and the first quarter will likely show a rebound in foreclosure activity, Mr. Sharga said.
Foreclosures are expected to remain elevated through the year as homeowners contend with stubbornly high unemployment, tougher credit standards for refinancing and falling home values. Mr. Sharga said he expected prices to dip another 5 percent nationally before finally bottoming out. The decline will push more borrowers underwater on their mortgages -- already, about one in five homeowners with a mortgage owe more than their home is worth.
First Published January 14, 2011 12:00 am
