Foreclosures Hit 2.8 Million Homes in 2009

By:: Kara Johnson | January 14, 2010

More than 2.8 million U.S. properties, or one home in 45, were subject to foreclosure in 2009, according to a year-end report released this week by the foreclosure data firm RealtyTrac.

The figure represents an increase of 21 percent over 2008 foreclosures and is up a whopping 120 percent from the 2007 total. The number includes all properties that were subject to at least one type of foreclosure action, including notices of default, scheduled foreclosure auctions and bank repossessions.

The report said that 2.21 percent of all U.S. homes were subject to at least one foreclosure action in 2009, up from 1.84 percent in 2008. 1.03 percent in 2007 and 0.58 percent in 2006. The report did not provide figures for the number of homes that were actually surrendered at the end of the foreclosure process.

“As bad as the 2009 numbers are, they probably would have been worse if not for legislative and industry-related delays in processing delinquent loans,” said James Saccacio, RealtyTrac CEO. “After peaking in July with over 361,000 homes receiving a foreclosure notice, we saw four straight monthly decreases driven primarily by short-term factors: trial loan modifications, state legislation extending the foreclosure process and an overwhelming volume of inventory clogging the foreclosure pipeline.”

Foreclosure actions rose by 15 percent in the month of December after the four months of declines, hitting nearly 350,000 U.S. properties. Even so, foreclosure actions were down 7 percent in the fourth quarter of the year, for the reasons cited above.

Saccacio predicted that foreclosures will continue at high levels into 2010, owing to a “massive” supply of mortgage delinquencies, many of which he expects will fall into foreclosure this year as lenders work their way through the backlog.

Nevada had the nation’s highest foreclosure rate for the third consecutive year, with foreclosure actions affecting 10 percent of all homes. Next highest were Arizona and Florida, with foreclosure rates of approximately 6 percent, and California, at nearly 5 percent.

Four states accounted for more than half of all foreclosure actions, with 1.4 million properties affected in California, Florida, Arizona and Illinois.

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