New Foreclosures Top 1 Million in 2009

More than one million homes have already been targeted for foreclosure in 2009, with the rate only expected to increase, according to data released this week by the Center for Responsible Lending (CRL).

The one million mark in new foreclosure filings was passed over the weekend, according to the Center, meaning homeowners have been notified foreclosure proceedings have begun. The Center predicts the rate will accelerate in the remaining seven months of the year, for a total of 2.4 million foreclosures begun in 2009.

"The escalation of foreclosures on all types of loans is alarming," said Michael Calhoun, CRL president. "It's easy to think, 'Well, that's tough luck for the families that lose their homes.' The truth is that foreclosures are costing neighboring families hundreds of billions of dollars and dragging down the entire economy. Foreclosures started today's crisis, and foreclosures will keep the crisis going if this epidemic continues."

Impact on neighboring properties

The Center predicts that 2009 foreclosures will reduce property values on approximately 70 million homes by over half a billion dollars. It projects that by 2012, those figures will total 9 million foreclosures, reducing the value of 92 million properties by a total of $1.9 trillion.

The CRL report comes at the same time that the credit monitoring firm TransUnion is reporting that over five percent of all U.S. mortgages were at least 60 days past due in the first quarter of 2009, the ninth quarter in a row that mortgage delinquencies have risen. The highest delinquency rates were in Nevada and Florida, each above 11 percent. TransUnion predicts that national mortgage delinquency rates will reach seven percent by the end of the year, and could go as high as 18 percent in Florida.

Rate of new delinquencies declines

Though the actual number of delinquencies increased, TransUnion notes that the rate of increase declined in the first quarter of 2009 for the first time since the recession began in 2007, suggesting the downturn may be turning around.

The TransUnion delinquency rate is considerably lower than similar figures reported last week by the Mortgage Bankers' Association, which bases its data on mortgages where the homeowner has missed at least one payment.