2008 Foreclosures Up 81%

Foreclosure filings were up 81 percent in 2008, according to RealtyTrac 2008 U.S. Foreclosure Market Report.

There were 3,157,806 foreclosure filings — default notices, auction sale notices, and bank repossessions — reported on 2,330,483 U.S. properties during the year, an 81 percent increase in total properties from 2007 and a 225 percent increase in total properties from 2006, the report said.

The huge increase means one in 54 homes received at least one foreclosure filing during the year.

December 2008's foreclosure filings were up 17 percent from November 2008, and up more than 40 percent from December 2007. Despite the December spike, foreclosure activity in the fourth quarter of 2008 was down 4 percent from the third quarter, but still up 40 percent from the fourth quarter of 2007.

“State legislation that slowed down the onset of new foreclosure activity clearly had an effect on fourth quarter numbers overall, but that effect appears to have worn off by December,” RealtyTrac CEO James Saccacio said. “The big jump in December foreclosure activity was somewhat surprising given the moratoria enacted by both Freddie Mac and Fannie Mae, along with programs from some of the major lenders and loan servicers aimed at delaying foreclosure actions against distressed homeowners.”

Saccacio believes new legislation that prolongs the foreclosure process hasn't done anything to prevent foreclosure filings, it's only delayed them.

A new California law requires lenders to provide written notice of their intent to initiate foreclosure proceedings 30 days prior to issuing a notice of default (NOD). After the law was enacted, NOD filings dropped more than 50 percent from 44,278 in August to 21,665 in September. But just three months later, the number of filings jumped 122 percent, to more than 42,000 in December.

“Clearly the foreclosure prevention programs implemented to-date have not had any real success in slowing down this foreclosure tsunami,” Saccacio said. “And the recent California law, much like its predecessors in Massachusetts and Maryland, appears to have done little more than delay the inevitable foreclosure proceedings for thousands of homeowners.”

The states with the top ten foreclosure rates in 2008 were Nevada, Florida, Arizona, California, Colorado, Michigan, Ohio, Georgia, Illinois, and New Jersey.

California had the greatest number of foreclosure filings, up 110 percent from 2007. Florida, Arizona, Ohio, Michigan, Illinois, Texas, Georgia, Nevada and New Jersey filled out the rest of the top ten in total foreclosures.