U.S., N.C. foreclosures soared in 2008

Posted January 15, 2009

— More than 2.3 million American homeowners faced foreclosure proceedings last year, an 81 percent increase from 2007, with the worst yet to come as consumers grapple with layoffs, shrinking investment portfolios and falling home prices.

North Carolina, the nation's 10th-largest state in terms of population, ranked 27th in foreclosures with 41,750 foreclosure filings. That was a 16.2 percent increase from 2007 and a 153 percent jump from 2006, according to RealtyTrac, a foreclosure listing firm based in Irvine, Calif., that compiled the figures.

Raleigh-Cary, meanwhile, ranked 71st among the nation's top 100 metropolitan areas with 4,444 filings. That was a 14 percent increase from 2007.

Nationwide, lenders actually repossessed more than 860,000 properties, more than double the 2007 level, according to RealtyTrac.

Moody's, a research firm, predicts the number of homes lost to foreclosure is likely to rise by another 18 percent this year before tapering off slightly through 2011.

Still, foreclosures – which keep breaking records going back 30 years, according to the Mortgage Bankers Association – are likely to remain well above normal levels for years to come, and that will continue to keep home prices from rebounding.

"Hitting bottom is a lot different than coming off the bottom," said Christopher Thornberg, a principal with Beacon Economics in Los Angeles.

The RealtyTrac report comes as Democrats, including President-elect Barack Obama, develop plans to use up to $100 billion of the remaining $350 billion in financial bailout money in an attempt to prevent the foreclosure crisis from getting even worse.

The four states with the highest foreclosure rates last year were Nevada, Florida, Arizona and California.

More than 1.1 million properties in those four states received a foreclosure notice, almost half the national total. And more than one in five of those households were in California, which is coping with massive job losses in the housing and mortgage industries as well as a rapid decline in home prices.

Among metro areas, Stockton, Calif., was first, with 9.5 percent of all housing units receiving a foreclosure filing last year. It was followed by Las Vegas, Riverside and Bakersfield, Calif., and Phoenix.

In December, more than 303,000 properties nationwide received at least one foreclosure notice, up more than 40 percent from a year earlier and up 17 percent from November, according to RealtyTrac.

Lenders repossessed nearly 79,000 properties in December, a 61 percent increase over a year ago.

New state laws, particularly in California, Massachusetts and Maryland, that required giving homeowners advance notice of foreclosure proceedings, reduced filings in several states. But the effect of those laws has worn off, and lenders appear to be going ahead with foreclosure, rather than trying to modify loans.

"If all you're doing is basically giving a stay of execution, then the inevitable will follow," said Rick Sharga, RealtyTrac's vice president for marketing.

Foreclosures would have been about 10 percent higher in California last year, Sharga said, if it were not for a law requiring lenders to give borrowers a 30-day warning before starting the foreclosure process.

Meanwhile, the president of the Federal Reserve Bank of Philadelphia said Wednesday he expects the economy to slowly start recovering in the second half of 2009 and inflation to remain below 2 percent over the next year.

In a speech at the University of Delaware, Charles Plosser also said that the unemployment rate probably won't drop anytime soon, but that he doesn't expect it to rise to double digits, as it did during the recession of the early 1980s.

"I expect the housing sector will finally hit bottom in 2009 and the financial markets will gradually return to some semblance of normalcy," said Plosser, adding that the current recession could be one of the longest in the post-World War II era.


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  • DontLikeTheSocialistObama Jan 15, 2009

    What do those who were responsible and got loans that they could afford and then made payments on time.

    Once again we're rewarding the irresponsible.

  • doubletap357 Jan 15, 2009

    At any rate the banks will be stuck with the property. The homeowner can move into an apartment and be done with it.

  • bs101fly Jan 15, 2009

    too bad for 'em, they shouldn't have lied to get something they never could afford or deserved!
    They are out on their rumps for a reason!

  • superman Jan 15, 2009

    Sorry people-- but there just aint't nothing free out there. People bought homes they couldnt afford, along with a couple big cars, and several cell phones. Most people could save a 100 or 200 a month if they were willing to give up their cell phones. Americans have become I get it now and pay later without any regard as to how or when they can pay. If you cannot afford to pay 4 or 5 percent interest-- you need to buy smaller! Who do you think would want to invest their money at that rate? A loan should be considered a gift until the person repays. You agreeded to the interest rate when you made the purchase and now you want to be a cry baby. Save some money and cancel the cable tv and the cell phone. You cant afford the house payment but you seem to do pretty good at affording the cable and the cell phone! Need to change your priorities.

  • doubletap357 Jan 15, 2009

    It will continue to increase as long as people are loosing their jobs at such a high rate. The bailouts aren't to help the homeowner who can no longer make his mortgage. The bailout is to help the banks who are going to be stuck with millions of dollars worth of properties that they can't get rid off. It seems to me that the mortgage companies would be more willing to work with lowering the payments and keep some money coming in rather than foreclose and be stuck with property they may not be able to sell.

  • familyfour Jan 15, 2009

    I cannot help to believe that many of these forclosures are due to lenders that put people in mortgages they cannot afford. The do magic with the paperwork, but that magic doesn't work in bank accounts when it's time to make that payment.....

    I'm with pleshy....

  • ihateliberals Jan 15, 2009

    Amen, pleshy

  • endoflineone Jan 15, 2009

    ...with 41,750 foreclosure filings. That was a 16.2 percent increase from 2007 and a 153 percent jump from 2006...

    Where was the news story last year???!!! Based on these numbers, it soared in 2007 not in 2008, 117% just betwen 2006 and 2007.

    More from the same Gloom and Doom prophets here.

    Agree 100% with you GATSBY.

  • Gatsby Jan 15, 2009

    pleshy: Your idea goes against every policy the Govt. loves...Reward the prudent? No...No....Reward the sloth & punish the prudent.

  • bushisaretard Jan 15, 2009

    Here's a solution - tell the mortgage companies to reduce EVERY HOMEOWNER'S interest rate by 2% across the board.