1 million Americans set to lose their homes to foreclosure in 2010 

Bankruptcy

July 19, 2010

Over a half a million homes were taken over by lenders in the first 6 months of the year with most experts forecasting the number to hit 1 million by the end of the year as lenders work their way through huge backlogs of delinquent loans.  Historically the number of homes foreclosed during any given year is closer to 100,000 homes. Last year in 2009, 900,000 homes were lost to lenders. 

1 in 78 homes in the U.S. received a foreclosure related warning during the months of January to June this year.  At the same time, borrowers who have fallen behind on their mortgages are being allowed to stay longer in their homes as lenders attempt to manage the number of distressed assets on the market.  According to Lender Processing Services, it takes on average about 15 months for a home loan to go from being one month late to the property being foreclosed and sold. 

The nature of the households who are entering foreclosure has changed since the foreclosure crisis first began. Initially the high foreclosure rate could be blamed on lax lending standards, so-called sub-prime loans, which allowed people to purchase more house than they realistically could afford. Now however, homeowners with good credit who took out conventional, fixed rate loans are the fastest growing group of foreclosures.  This shift points to the fact that unemployment or reduced income is now the main culprit behind this year’s foreclosures. 

Nevada had the highest foreclosure rate for the first six months of this year, followed by Arizona, Florida, California and Utah.  Neither Kansas nor Missouri were in the top 10.  Peter Jouras can provide more information by being your foreclosure attorney