June 27, 2022

2010 Record Year For Foreclosures, But Not Over Yet

housing prices

Foreclosures were at a record high in 2010, but expected to get worse this year

Last year, there were some 2.9 million properties that went into foreclosure, which is up 2% from 2009. That is even with December being down by 26%. Had there not been a drop in foreclosure activity in December, the number would have easily topped 3 million.

At that rate, we will see one house in every 45 receive a foreclosure filing. There are currently about 5 million borrowers at least 2 months behind on mortgages.

There were many homes that had the foreclosure process stopped in late 2010, but those will now restart causing 2011 to start off with as many as a quarter million. RealtyTrac has warned all the big lending banks like Fannie and Freddie that another tsunami of foreclosures is coming.

With another wave of foreclosures coming, house prices are expected to dip down another 5 % nationally at which point they may bottom out.

Currently Nevada, Arizona and Florida are posting the highest foreclosure rate. Florida, California, Arizona, Illinois and Michigan accounted for more than half of all the foreclosure activity in the country. Those 5 states alone accounted for almost 1.5 million households receiving a filing.

California seems to be the first state that is starting to be on the mend. Home prices hit rock bottom in April of 2009 and since then they have slowly started to increase again.

With unemployment still high, falling house prices, interest rates going back up and appraisals getting tougher, it’s going to take a lot to turn this all around.