The first quarter of 2010 saw record numbers of foreclosures in the US, a sign banks are upping their pace of action on troubled loans. According to a report, the number of foreclosed US homes during the first quarter was 35 percent higher than the same period last year. Additionally, the number of US homeowners in danger of facing foreclosure grew 7 percent from the previous quarter, 7 percent over 2009's first quarter. More homes, in fact, were seized by banks than in any quarter since 2005. Many analysts predict there could be more than a million homes foreclosed on this year.
The wave of foreclosures brought on by the recession began to ebb last year as the Obama Administration pressured banks to modify troubled loans. Several states also enacted a moratorium on foreclosures, hoping that a majority of troubled homeowners would be able to catch up. Some banks have had difficulty, as well, handling the massive numbers of delinquent loans. All these factors have helped slow the pace of foreclosures, but now the pace is picking back up. In excess of 900,000 homeowners received at least one foreclosure-related notice during the year's first quarter.
The federal government's $75 billion foreclosure prevention program has helped a small fraction of these troubled homeowners. Through March, about 230,000 homeowners had received a loan modification under the program, only about a fifth of all homeowners who signed up for the program in the last year. Nearly 160,000 of those homeowners have been dropped from the program because they couldn't make payments or failed to complete mandatory paperwork. That number was only at 90,000 the previous month.
The Obama Administration announced last month plans to expand the program to help some troubled homeowners to reduce the principle on their loans and to allow unemployed homeowners time to get back on their feet. The details of these new programs, however, are expected to take months to work out. Nevada, California, Arizona, and Florida had the highest rates of foreclosure during the quarter. Record-high prices and speculation caused a flood of new home construction during the housing boom in those states, and now there is a sizable inventory of unsold homes. In Nevada, for example, one of every 33 homes was in jeopardy of foreclosure, four times the average ratio for the nation. In Arizona, it was one in 50 homes, and in Florida, one of every 58 homes received a foreclosure notice. California, meanwhile, accounted for the biggest share of the nation's foreclosures, with about 22 percent of the nation's total foreclosures occurring in that state.
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