Foreclosures to Hit Record High in 2011

Though there have been a number of indications that the economy is slowly crawling back from its long malaise, the housing crisis is expected to continue. Lenders will most likely be foreclosing on more homes in 2011 that it has since before the crisis began in 2006, as 5 million homeowners are at least two months behind on their mortgage payments, according to the Washington Post.

According to RealtyTrac, an online market for foreclosure properties, a record 2.9 million U.S. properties received foreclosure filings in 2010 despite a 30-year low in December. One in 45, or 2.23 percent of all housing units in the country received a foreclosure filing during the year, up from 2.21 percent in 2009, 1.84 percent in 2008, 1.03 percent in 2007 and .58 percent in 2006. In December, default notices decreased 4 percent and 35 percent from December 2009 due to allegations that evictions were handled improperly and lenders largely refrained from taking action against borrowers well behind on their payments.

However, banks have restarted eviction proceedings and, because of the slowdown in late 2010, the 2011 foreclosure notices will likely hit new highs as many homes that escaped foreclosure because of the increased government scrutiny before will be foreclosed on soon.

“Total properties receiving foreclosure filings would have easily exceeded three million in 2010 had it not been for the fourth quarter drop in foreclosure activity -- triggered primarily by the continuing controversy surrounding foreclosure documentation and procedures that prompted many major lenders to temporarily halt some foreclosure proceedings,” said James J. Saccacio, chief executive officer of RealtyTrac. “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 -- which we estimate may be as high as a quarter million -- will likely be restarted and add to the numbers in early 2011.”