Foreclosures jumped 81% last year

01.16.09
By Nicholas Storie

The weak economy is continuing to take its toll on the nation's homeowners, with millions of families threatened with losing their homes.

New figures from RealtyTrac indicate that 3.1 million foreclosure filings were issued last year, a number equal to approximately 1 in every 54 households.

It also reflects a rise of 81 percent compared with the previous year and a 225 percent increase compared with data from 2006.

The figures may put more pressure on the government to speed up or enhance its reaction to the foreclosure crisis. The data reveals that a total of 861,664 families lost their homes in 2008 due to foreclosure.

"Clearly the foreclosure prevention programs implemented to date have not had any real success in slowing down this foreclosure tsunami," commented James Saccacio of RealtyTrac.

Meanwhile, spokesman Rick Sharga predicted that this year will not get any better for those who are trying to avoid foreclosure.

In fact, he forecasts that January could be a record month for filings. The end of last year already suggested an upward trend.

Part of the problem plaguing homeowners is falling house prices. As homes lose value, people risk falling "underwater" on their mortgages - meaning they owe more on their home loan than the property itself is worth.

Of course, the flip side to plummeting house prices is that it potentially opens up the market to new homebuyers who could not afford to buy a property during the housing bubble.

If you are shopping for a home, know that having a high credit score will get you the best deals on a mortgage. You are also likely to need a larger down payment than you would have just a couple of years ago.

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More Americans are losing their homes