Foreclosures still taking toll on homeowners

10.15.09
By Lewis Green

Foreclosures are continuing to take their toll on many homeowners' credit scores, despite growing signs of an improving economy.

This week, RealtyTrac announced that foreclosure activity had increased 5 percent in the third quarter of 2009, affecting 937,840 properties nationwide. This was said to involve one in every 136 housing units in the country, and marked a 23 percent increase over the third quarter of 2008.

"(Repossession) activity increased from the previous quarter in all but two states and the District of Columbia, indicating that lenders may be starting to work through some of the pent-up foreclosure inventory caused by legislative delays, loan modification efforts and high volumes of distressed properties," said RealtyTrac CEO James J. Saccacio.

One thing that remained relatively unchanged in the current figures is that once again, Nevada, Arizona and California had some of the highest foreclosure rates in the nation. These and a handful of other states were especially prone to speculative building and home sales, as well as irresponsible lending activity, during the real estate boom, and are now feeling the consequences.

In Nevada, the foreclosure rate was said to be almost six times the national average, and the latest figures marked a 59 percent year over year increase for foreclosure filings. Elsewhere, California was said to account for 27 percent of the nation's total foreclosure filings in the third quarter, even as its overall foreclosure activity actually fell by 2 percent.

Six states were said to account for nearly 60 percent of the nation's foreclosures, with other states in the top ten including Michigan, Arizona, Florida and Illinois.

Elsewhere, a Reuters report notes that there has been an upswing in professional auctioneers helping lenders unload foreclosed properties, even though in some cases buyers can still be hard to find for the heavily discounted properties. The report also notes that foreclosures may spike yet again in the coming months, indicating that for many Americans, further damage to their credit scores awaits.

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Foreclosure trouble is still a fact of life for millions of Americans.