Foreclosures Set Record in 2009
The December number is particularly depressing because it shows that the foreclosure problem is not even close to going away. The federal government had hoped against hope that its efforts to modify mortgages would stop an increase in foreclosures. But the programs to keep people in their homes could not stay ahead of rising unemployment and underwater mortgages. Many people with home loans worth more than the homes themselves abandon properties that they believe will never have any equity value.
A look ahead, at least short term, does not offer much encouragement. While the December unemployment numbers showed some deceleration, more people are still losing jobs every month. Programs giving home buyers tax credits will expire early this year. Mortgage rates are creeping up as the Fed prepares to cut its purchase of mortgage-backed securities, and Treasury borrowing to fund the deficit is keeping the capital markets under pressure.
In other words, 2010 may be a year in which the number of foreclosures drops compared to 2009, but it may not drop by much.