Original Blog Entry: Foreclosures in U.S. could hit 1 million

truesee — Thu, 15 Jul 2010 16:44:07 GMT

Foreclosures in U.S. could hit 1 million as housing market continues to struggle, report finds

Sean Alfano

DAILY NEWS STAFF WRITER

Thursday, July 15th 2010, 7:39 AM

Mallin/BloombergOne in 78 homes have been issued a foreclosure warning in the first half of 2010.

Buying the house was the easy part. Keeping the home is another story.

More than one million homes are facing foreclosure, new numbers indicate. So far, nearly 528,000 homes have already been repossessed, according to RealtyTrac Inc.

That would be unprecedented, Rick Sharga, a senior vice president at RealtyTrac, said.

The wave of foreclosures stems from banks and lenders trying to clear the logjam of borrowers who have fallen way behind on loans.

While the report isn't all bad news the number of foreclosures is down 5 percent in 2010 compared to the last six months of 2009 it reflects a housing market still mired in crisis.

Between January and June of this year, one in 78 homes 1.7 million in all got a foreclosure warning.

While banks have pulled back their pressure on delinquent borrowers, it is only to avoid flooding the housing market with more foreclosed homes.

The banks are really sort of controlling or managing the dial on how fast these things get processed, Sharga said.

Despite the Obama administration's $75 billion effort to stem the foreclosure outbreak, at least a third of 1.2 million homeowners who sought help have dropped out of the government's aid program.

The immediate outlook doesn't look to good, either.

Even if the economy doesn't get worse, Sharga says it will take until 2013 for banks to clear its backlog of foreclosed homes.

Good economic news, however, has been hard to find lately.

The unemployment rate is at 9.5% and more than a million people will lose their jobless benefits in July.

And the June housing numbers showed that prices of new and previously-owned homes dropped to its lowest-level in 10 years. Those prices stand to drop even lower as more foreclosed homes hit the market.

The downward pressure from foreclosures will persist, Celia Chen, senior director of Moody's Economy.com said.

Prices will be very weak well into 2012.

RealtyTrac, a foreclosure listing service, says in a typical year 100,000 homes are repossessed by the banks.

Overall, Nevada has been the hardest hit in 2010, with one in 17 homes facing foreclosure. Arizona, Florida, California and Utah round out the top five states in foreclosure trouble.

With News Wire Service

Read more: http://www.nydailynews.com/money/2010/07/15/2010-07-15_foreclosures_in_us_could_hit_1_million_as_housing_market_continues_to_struggle_r.html#ixzz0tlnDaKFa

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