Foreclosures rise as banks repossess more homes
More people lost their homes to foreclosure during the first quarter of this year as banks worked through a backlog of troubled borrowers and repossessed more properties, according to data released Thursday by RealtyTrac.
The number of homes repossessed, the final stage of the foreclosure process, reached 257,944 during the quarter. That is up 9 percent from the previous quarter and 35 percent from the first quarter of 2009, according to RealtyTrac, an online service that estimates that it tracks about 90 percent of the housing market.
Foreclosures have been suppressed over the past year by government and industry mortgage relief programs to keep people in their homes. But as those efforts have faltered, economists and industry experts expect more borrowers to lose their homes through foreclosure or short sales, in which properties are sold for less than what's owed.
During the first quarter, banks repossessed about 130 homes in the District, about the same number as during the corresponding period last year. But more were repossessed in Maryland and Virginia in the first quarter of 2010 -- 2,500 and 5,000, respectively.
"We're not surprised to see an influx of [repossessed properties]. We thought this would be coming, we just didn't know when," said Daren Blomquist, spokesman for RealtyTrac.
Distressed sales have started to make up a growing part of home sales, according to data from First American CoreLogic, a research firm. Foreclosures and short sales accounted for 29 percent of home sales in January, compared with about 23 percent in July.
This comes as the Obama administration revamps its foreclosure prevention program to provide more help to borrowers who owe more than their homes are worth, a situation known as being underwater.
According to data released Wednesday by the Treasury Department, about 1 million borrowers have received help under the Making Home Affordable program, which lowers homeowners' payments to 31 percent of their income. But the majority are at risk of losing the mortgage aid and still have to prove they qualify.
Only about 230,000 U.S. homeowners had secured permanent loan modification under the program through last month, according to the data, and more than 150,000 had been dropped from the program because they didn't keep up with their payments or their lender determined they did not qualify after all.