WASHINGTON — The number of American households threatened with losing their homes grew 24 percent in the first three months of this year and is poised to rise further as major lenders restart foreclosures after a temporary break, according to data released today.
Arizona had one of the biggest foreclosure rates, at one for every 54 homes in the state.
The big unknown for the coming months, however, is President Obama's plan to help up to 9 million borrowers avoid foreclosure through refinanced mortgages or modified loans. The Obama administration expects its plans to make a big dent in the foreclosure crisis. But it remains to be seen whether the lending industry will fully embrace it, despite $75 billion in incentive payments.
The faltering economy is causing the housing crisis to spread. Nationwide, nearly 804,000 homes received at least one foreclosure-related notice from January through March, up from about 650,000 in the same time period a year earlier, according to RealtyTrac Inc., a foreclosure listing firm.
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In March, more than 340,000 properties were affected, up 17 percent from February and 46 percent from a year earlier.
In RealtyTrac's report, Nevada, Arizona, California and Florida had the nation's top foreclosure rates. In Nevada, one in every 27 homes received a foreclosure filing. Rounding out the top 10 were Illinois, Michigan, Georgia, Idaho, Utah and Oregon.
Foreclosures "came back with a vengeance" last month and are likely to keep rising, said Rick Sharga, RealtyTrac's senior vice president for marketing.
Nearly 191,000 properties completed the foreclosure process and were repossessed by banks in the quarter. While the number was down 13 percent from the fourth quarter of last year, it is expected to rise through the summer and then possibly taper off.
Fannie Mae and Freddie Mac, the big mortgage finance companies, together with many banks had temporarily halted foreclosures in advance of Obama's plan. Now armed with the details about which borrowers can qualify, the mortgage industry has begun foreclosing on ineligible borrowers.
The Treasury Department has signed contracts with six big loan-servicing companies — including Citgroup, Wells Fargo and JPMorgan Chase. Many already have started processing loans as part of the government's "Making Home Affordable" plan.
"We need to get the long-term solutions for these folks," Shaun Donovan, Obama's housing secretary, said in an interview.
In the coming months, Donovan said, there are still likely to be increased foreclosures, especially from vacant houses, second homes and those owned by speculators. None of those properties will qualify for a loan modification.
However, he remained optimistic that overall foreclosures could start to decrease during the summer.
LOCAL angle
The number of Pima County homes facing foreclosure dropped slightly in the first quarter compared with the fourth quarter of last year, RealtyTrac Inc., a foreclosure listing firm, reported today.
But even despite the drop, foreclosure activity in the Tucson metro area remains near a historic high.
RealtyTrac reported 2,389 trustee notices and 886 homes that were auctioned back to the bank in the first quarter.
That's down slightly compared with the fourth quarter of last year, when RealtyTrac reported 2,451 trustee notices and 1,107 properties that went back to the bank.
While those numbers are promising, RealtyTrac's numbers don't jibe with data provided by the Pima County Recorder's Office.
Data from that office show 3,052 trustee sales notices and 1,353 trustee deeds.
RealtyTrac spokesman Daren Blomquist could not explain the difference in numbers, but he said it surprised him.
Across the state, one in 54 properties was in some stage of foreclosure in the last quarter as foreclosure activity increased by about 6.22 percent, RealtyTrac reported.
Nearly 38,000 homes in Maricopa County received foreclosure notices in the first quarter, an increase of about 7 percent compared with the fourth quarter of last year.
— Josh Brodesky