Foreclosure Filings Near 4 Million In 2009, Worst Since Depression
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With the worst results in recent history, year-end figures from RealtyTrac.com show that 3,957,643 foreclosure filings — default notices, scheduled foreclosure auctions and bank repossessions — were reported on 2,824,674 U.S. properties in 2009. The 2009 total is 21 percent higher than 2008, itself a record year.
The bloated foreclosure numbers are in large measure a by-product of the more than 7.2 million jobs lost since December 2007 and the huge numbers of toxic loans issued by lenders from 2004 through 2007. Unfortunately, foreclosure totals in 2010 will likely be similar to the numbers seen in 2009.
Going back to 2005, the annual totals from RealtyTrac look like this:
___ 2009 — 3,957,643 foreclosure filings — up 21 percent.
___ 2008 — 3,157,806 foreclosure filings — up 81 percent.
___ 2007 — 2,203,295 foreclosure filings — up 75 percent.
___ 2006 — 1,259,118 foreclosure filings — up 42 percent.
___ 2005 — 885,468 foreclosure filings.
It Could Have Been Worse
“As bad as the 2009 numbers are, they probably would have been worse if not for legislative and industry-related delays in processing delinquent loans,” said James J. Saccacio, chief executive officer of RealtyTrac. “After peaking in July with over 361,000 homes receiving a foreclosure notice, we saw four straight monthly decreases driven primarily by short-term factors: trial loan modifications, state legislation extending the foreclosure process and an overwhelming volume of inventory clogging the foreclosure pipeline.
“Despite all the delays, foreclosure activity still hit a record high for our report in 2009, capped off by a substantial increase in December,” Saccacio continued. “In the long term a massive supply of delinquent loans continues to loom over the housing market, and many of those delinquencies will end up in the foreclosure process in 2010 and beyond as lenders gradually work their way through the backlog.”
December Foreclosure Filings Up
Foreclosure filings, says RealtyTrac, “were reported on 349,519 U.S. properties in December, a 14 percent jump from the previous month and a 15 percent increase from December 2008 — when a similar monthly jump in foreclosure activity occurred. Despite the increase in December, foreclosure activity in the fourth quarter decreased 7 percent from the third quarter, although it was still up 18 percent from the fourth quarter of 2008.”
There might be some reason to believe that the December numbers would have been lower because foreclosure levels had fallen during the four prior months and a number of lenders had instituted eviction moratoriums at year end. However, as pointed out here, stopping evictions is not the same thing as stopping foreclosures.
Major Foreclosure States
RealtyTrac says that “four states accounted for more than 50 percent of the nation’s 2009 total, with more than 1.4 million properties receiving a foreclosure filing in California, Florida, Arizona and Illinois combined.”
There has been some effort to explain that today’s foreclosure levels would not be so high if we did not count the worst-hit states. However, unless they secede from the Union, these states are part of the United States and their foreclosures are part of the national total. Moreover, as RealtyTrac reports, “2.21 percent of all U.S. housing units (one in 45) received at least one foreclosure filing during the year, up from 1.84 percent in 2008, 1.03 percent in 2007 and 0.58 percent in 2006.”
What’s surprising about the 2009 results is that there have been massive increases in foreclosure filings during the past two years in some unexpected areas such as New England, South Carolina, Idaho
This gross increase in foreclosure activity is happening in many states. RealtyTrac reports major growth during the past year in:
___ Alabama (up 156.26%)
___ Hawaii (up 182.64%)
___ Idaho (up 101.61%)
___ Mississippi (up 135.59%)
___ West Virginia (up 115.91%)
Happily, there were some states where foreclosure levels fell according to RealtyTrac:
___ Connecticut (down 10.24%)
___ District of Columbia (down 22.64%)
___ Indiana (down 9.87%)
___ Massachusetts (down 18.54%)
___ Missouri (down 8.75%)
___ Nebraska (down 42.16%)
___ North Carolina (down 16.07%)
___ Ohio (down 10.53%)
___ Rhode Island (down 23.06%)
Looking back over the past two years, RealtyTrac says some states actually did fairly well — while others saw huge increases in foreclosure filing activity:
___ North Carolina (foreclosure filings were down 2.46%)
___ Nebraska (down 49.26% — the best in the nation)
___ Alabama (foreclosure filings were up 257.07%)
___ Arizona (up 323.17%)
___ The District of Columbia (up 316.34%)
___ Hawaii (up 831.88%)
___ Idaho (up 371.46%)
___ Kansas (up 272.06%)
___ Maine (up 1,011.19%)
___ Mississippi (up 283.39%)
___ New Hampshire (up 482.39%)
___ Oregon (up 303.27%)
___ South Carolina (up 492.49%)
___ South Dakota (up 3,087.50%)
___ Vermont (up 393.10%)
What About 2010?
The view here is that 2010 will largely echo 2009. Why? Continuing high levels of unemployment and continued fallout from the toxic loan era. In particular, watch the delinquency and foreclosure rates for option ARMs. For my specific predictions for next year — and why I am making such forecasts — please see: Real Estate 2010 — Will It Be Better?
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