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US home foreclosures reach record high as owners default
By Lynn Adler |
April 16, 2010, Friday
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Print Edition
Print Edition
UNITED States home foreclosures actions spiked in March and set a quarterly record despite federal programs to combat the unrelenting pace that homeowners are defaulting on mortgages, RealtyTrac said yesterday.
The government aid, intensified in late March, has so far failed to overcome the staggering effects of nearly double-digit unemployment and wage cuts on borrowers.
Foreclosures jumped 19 percent to a monthly record in March, driving first-quarter actions up 7 percent from the prior quarter and 16 percent from a year ago to a record 932,000 properties.
One in every 138 US households got a foreclosure filing in the quarter such as a notice of default, auction or bank repossession.
Banks took back more than 257,000 properties in the quarter, a record high, putting repossessions on pace to shatter last year's record of more than 918,000 properties.
"If there's going to be a modification program that really has a material effect this year, it's not there yet," Rick Sharga, senior vice president at RealtyTrac, told Reuters.
Government and lender efforts to alter loan terms for borrowers at risk of losing their homes have resulted in more temporary than permanent fixes, delaying the inevitable.
Foreclosure auctions were due for the first time on nearly 370,000 properties in the first three months of 2010, a quarterly record, up 21 percent from the same time last year.
"As lenders go through these modification program options and short sale options and decide that loans don't qualify for either, they're going to start processing more of these into foreclosure and putting them back on the market," Sharga said.
"The most likely scenario is that we will be working through this inventory of distressed property well into 2013," he added.
More than 3 million US homes are likely to get a foreclosure notice this year, topping last year's record 2.8 million, RealtyTrac forecasts.
Home prices have lost about 30 percent, on average, from peak prices in 2006.
The government aid, intensified in late March, has so far failed to overcome the staggering effects of nearly double-digit unemployment and wage cuts on borrowers.
Foreclosures jumped 19 percent to a monthly record in March, driving first-quarter actions up 7 percent from the prior quarter and 16 percent from a year ago to a record 932,000 properties.
One in every 138 US households got a foreclosure filing in the quarter such as a notice of default, auction or bank repossession.
Banks took back more than 257,000 properties in the quarter, a record high, putting repossessions on pace to shatter last year's record of more than 918,000 properties.
"If there's going to be a modification program that really has a material effect this year, it's not there yet," Rick Sharga, senior vice president at RealtyTrac, told Reuters.
Government and lender efforts to alter loan terms for borrowers at risk of losing their homes have resulted in more temporary than permanent fixes, delaying the inevitable.
Foreclosure auctions were due for the first time on nearly 370,000 properties in the first three months of 2010, a quarterly record, up 21 percent from the same time last year.
"As lenders go through these modification program options and short sale options and decide that loans don't qualify for either, they're going to start processing more of these into foreclosure and putting them back on the market," Sharga said.
"The most likely scenario is that we will be working through this inventory of distressed property well into 2013," he added.
More than 3 million US homes are likely to get a foreclosure notice this year, topping last year's record 2.8 million, RealtyTrac forecasts.
Home prices have lost about 30 percent, on average, from peak prices in 2006.
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