ECONOMYForeclosure -- March 11, 2010 at 1:38 PM ET
Foreclosures Drop to Slowest Pace in Four Years
Foreclosure data released Thursday offer a glimmer of hope for the U.S. housing market. But make that a qualified glimmer.
Foreclosures slowed to their slowest pace in four years in February, but were still 6 percent higher than a year ago, according to the research firm RealtyTrac. In all, 308,524 properties, or one out every 418 households, faced foreclosure last month, up 2 percent from January 2010.
For the 38th month in a row, Nevada was the state hardest hit with one out of every 102 households in foreclosure during February. Arizona and Florida followed, each with one in 163 homes in foreclosure. California was fourth, with one in 195 households in foreclosure.
In a statement, James J. Saccacio, chief executive of RealtyTrac, said:
"This leveling of the foreclosure trend is not necessarily evidence that fewer homeowners are in distress and at risk for foreclosure, but rather that foreclosure prevention programs, legislation and other processing delays are in effect capping monthly foreclosure activity -- albeit at a historically high level that will likely continue for an extended period."
The Obama administration has worked to stem the tide of foreclosures through its $75 billion Making Home Affordable program, which aims to reduce the monthly mortgage payments of struggling homeowners.
Rick Sharga, a senior vice president at RealtyTrac, told Marketplace that foreclosures have slowed only because banks are overwhelmed by paperwork:
"We're running at roughly six to seven times the level of foreclosure activity the banks are set up to handle. It's a little bit of a pig in a python scenario, where it's just taking an awful long time to process the sheer volume of bad loans that are out there."
Calculated Risk, meanwhile, says, "Blame it on the snow!"