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Sunday, January 24, 2010

Canadian Mortgage Broker News - U.S. foreclosures hit close to three million last year

Canadian Mortgage Broker News - U.S. foreclosures hit close to three million last year

U.S. foreclosures hit close to three million last year


The number of U.S. foreclosures hit a record-high 2.8 million properties in 2009, according to RealtyTrac, a 21 per cent jump from 2008.

The real estate data company said that while foreclosure prevention programs, including government-implemented loan modification programs, helped keep more homeowners in their homes, there is still a high level of re-defaults or bank repossessions. It predicted the high number of foreclosures will continue in 2010 due to an unemployment rate of over 10 per cent and wage cuts.

"Until the lenders start to get into principal balance reduction you're going to continue to see high re-default rates," Rick Sharga, senior vice president at RealtyTrac, said in an interview with Reuters, adding he hadn't seen any appetite for re-defaults on the part of the lenders.

While foreclosure rates in the U.S. dropped in the fourth quarter of 2009 compared to the rest of the year, December saw a 14 per cent jump in foreclosure notices compared to November, according to RealtyTrac. The company said California, Florida Arizona and Illinois accounted for more than half of all foreclosure actions in 2009.

Sharga told Reuters the U.S. housing market would see a "long, slow, and flat" recovery that "probably won't feel much better until 2013."