Banks repossessed record 1m homes in the U.S. last year... and this year could be even worse

Published 14th Jan 2011

Banks repossessed more than a million U.S. homes for the first time last year as questions about the foreclosure process remain.

A record year saw 1.05million homes seized, up from the previous year of 918,000, real estate data firm RealtyTrac said.

The number of foreclosure filings, which includes default notices, auctions and repossessions, was at a record 2.9million in 2010, including 257,747 in December alone.

Lenders are expected to take back even more this year with five million borrowers at least two months behind on their mortgages and more facing missed payments with jobs losses on the horizon.

James J. Saccacio, chief executive of RealtyTrac, said: 'Total properties receiving foreclosure filings would have easily exceeded 3million in 2010 had it not been for the fourth-quarter drop in foreclosure activity.

'It was triggered primarily by the continuing controversy surrounding foreclosure documentation and procedures that prompted many lenders to temporarily halt some proceedings.

'Even so, 2010 foreclosure activity still hit a record high for our report, and many of the foreclosure proceedings that were stopped in late 2010 will likely be restarted and add to the numbers in early 2011.'

Nevada, Arizona and Florida continue to post the highest foreclosure rates in the country.

Just five states - California, Florida, Arizona, Illinois and Michigan - accounted for more than half of all foreclosure activity.

One in 45 U.S. households received a foreclosure filing last year - up 1.67 per cent from the previous year.

In September, allegations surfaced that evictions had been handled improperly by banks.

Under scrutiny from the government, lenders temporarily halted taking actions on people severely behind on their payments.

But most banks have since resumed their eviction processes and the first three months of 2011 are likely to show a resurgence in the practice.

Beleaguered homeowners are also having to deal with high unemployment, tougher credit conditions and falling home values. Prices are expected to drop another five per cent.

That decline will push more borrowers behind on their mortgages with one in five homeowners already owing more than their home is worth.

Source: ' ThisIsMoney '

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