Home Foreclosures Hit A Record

by Bob Schwartz

home foreclosures

Foreclosures hit a record in the first quarter. According to RealtyTrac Inc. more than 900,000 households or one for every 138 homes received a foreclosure notice in the past three months. Experts say it s a sign that banks are beginning to sort through a backlog of troubled homes at a faster pace. The rate of foreclosures had eased last year as the Obama administration sought to modify loans to give owners more time to work out problems. As several states had similar programs, the trend of foreclosures slowed down, but now that appears to be reversing. We re finally seeing the banks start to process the inventory that has been in foreclosure, but delayed in processing. We expect the pace to accelerate as the year goes on, said Rick Sharga, a RealtyTrac senior vice president.

About 231,000 homeowners have completed loan modifications as part of the Obama administration’s flagship foreclosure prevention program through March. That’s about 21 percent of the 1.2 million borrowers who began the program over the past year. But another 158,000 homeowners who signed up have dropped out-either because they didn’t make payments or failed to return the necessary documents. That’s up from about 90,000 just a month earlier. Last month, the administration expanded the program, launching a plan to reduce the amount some troubled borrowers owe on their home loans and give jobless homeowners a temporary break. But the details of those programs are expected to take months to work out. Homeowners continue to fall behind on payments because they’ve lost their job or seen their mortgage payment rise due to an interest-rate reset. Many are unable to refinance because they now owe more on their loan than their home is worth. The Obama administration’s $75 billion forec losure prevention program has only been able to help a small fraction of troubled homeowners.