Record 2.8 Million Foreclosures Reported in 2009

By:: Peter King | January 28, 2010

A record 2.8 million U.S. properties went into foreclosure last year, a 21 percent increase over the year before and more than double the number recording in 2007, according to figures released today by the foreclosure tracking company RealtyTrac.

That figure represents 2.2 percent of all U.S. homes with mortgages, or about one home in 45 that was subject to a foreclosure action in 2009. Despite those numbers, company officials say the number would have been even higher if not for loss-preventions efforts such as loan modifications and foreclosure moratoriums, as well as the sheer number of defaults overwhelming lenders’ ability to process them all.

“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 J. Saccacio, chief executive officer of RealtyTrac. He added “In the long term a massive supply of delinquent loans continues to loom over the housing market, and many of those delinquencies will end up in the foreclosure process in 2010 and beyond as lenders gradually work their way through the backlog.”

Foreclosures peaked in July with more than 361,000 homes subject to foreclosure actions, followed by four consecutive months of declines, which Saccacio attributed to short-term factors such as those described above. However, foreclosures jumped again in December, hitting nearly 350,000 as the year ended.

Four states – California, Florida, Arizona and Illinois – accounted for over 50 percent of all U.S. foreclosures. The highest annual foreclosure rates were posted by Nevada, Arizona and Florida, with nearly one Nevada home in 10 being foreclosed on. Arizona and Florida saw foreclosure rates of approximately 6 percent, or one home in every 16-17.

By contrast, the nation’s lowest foreclosure rate was in Vermont, at 0.05 percent or one home in every 2,178. In the middle of the pack was South Carolina, which posted a rate of 1.24 percent, or one home in 80, for the nation’s 25^th highest rate among the 50 states.

Despite the sharp national increase, eight states – Connecticut, Indiana, Massachusetts, Nebraska, North Carolina, Rhode Island and Tennessee - saw declining foreclosure rates last year compared to 2008.

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