More than 2.3 million US homeowners faced foreclosure proceedings last year, an 81 percent increase from 2007, with the worst yet to come as consumers grapple with layoffs, shrinking investment portfolios and falling home prices.
Nationwide, more than 860,000 properties were actually repossessed by lenders, more than double the 2007 level, according to RealtyTrac, a foreclosure listing firm based in Irvine, California, which compiled the figures.
Moody’s Economy.com, a research firm, predicts the number of homes lost to foreclosure is likely to rise by another 18 percent this year before tapering off slightly through 2011.
Still, foreclosures — which keep breaking records going back 30 years, according to the Mortgage Bankers Association — are likely to remain well above normal levels for years to come, and that will continue to keep home prices from rebounding.
“Hitting bottom is a lot different than coming off the bottom,” said Christopher Thornberg, a principal with Beacon Economics in Los Angeles, California.
The RealtyTrac report comes as Democrats, including US president-elect Barack Obama, develop plans to use up to US$100 billion of the remaining US$350 billion in financial bailout money in an attempt to prevent the foreclosure crisis from worsening.
The four states with the highest foreclosure rates last year were Nevada, Florida, Arizona and California.
More than 1.1 million properties in those four states received a foreclosure notice, almost half the national total. And more than one in five of those households were in California, which is coping with massive job losses in the housing and mortgage industries and a drop in home prices.
Last month, more than 303,000 properties nationwide received at least one foreclosure notice, up more than 40 percent from a year earlier and up 17 percent from November, RealtyTrac said.
Nearly 79,000 properties were repossessed by lenders last month, a 61 percent increase over a year ago.