Last year was a record-breaking year for home repossessions, with roughly 1.05 million mortgage borrowers losing their homes, according to real estate data firm RealtyTrac. That is up over 2009’s 918,000 foreclosures and its the first time that figure has passed the million mark. By contrast, in 2005 there were only about 100,000 properties seized by banks for default.
Foreclosure filings, which includes default notices and auctions, as well as actual repossessions, were up to 2.9 million in 2010.
“Total properties receiving foreclosure filings would have easily exceeded 3 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, as quoted in a Reuters article .
“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 re-started and add to the numbers in early 2011,” he said.
Things were particularly bad in Nevada last year, the worst hit state, where one in 11 households received some form of foreclosure notice.
Still, while the mortgage market will continued to be plagued with foreclosures next year, there may be some silver lining to this latest report. It found that more than half of all foreclosure activity was concentrated in five states (California, Florida, Arizona, Illinois and Michigan) which means that most of the states have a chance of seeing much faster mortgage market recoveries this year. Fewer foreclosures will lead to stabilizing home prices, which will calm fears of many current homeowners, potential buyers and mortgage investors. Foreclosures are going to continue to be painful, but the process may be a necessary evil in getting the market back to a healthy equilibrium for future years.
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