Foreclosure Rates Surge, Biggest Jump in 5 Years

Associated Press A record number of U.S. homes were lost to foreclosure in the first three months of this year, a sign banks are starting to wade through the backlog of troubled home loans at a faster pace.

A record number of U.S. homes were lost to foreclosure in the first three months of this year, a sign banks are starting to wade through the backlog of troubled home loans at a faster pace, according to a new report.

RealtyTrac Inc. said Thursday that the number of U.S. homes taken over by banks jumped 35 percent in the first quarter from a year ago. In addition, households facing foreclosure grew 16 percent in the same period and 7 percent from the last three months of 2009.

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The $75 billion foreclosure prevention program started by Obama last year hasn't really lived up to his expectations.

Only about 21% of the 1.2 million homeowners have completed the paperwork for loan modifications. Another 158,000 homeowners who initially signed up dropped out. They either didn't finish the paperwork, or didn't make the required payments.

Is the system too complicated? Or are we still in that troubled of economic times?

Last month, the administration expanded the program, launching a plan to reduce the amount some troubled borrowers owe on their home loans and give jobless homeowners a temporary break. But the details of those programs are expected to take months to work out.

The states with the highest foreclosure rates in the first quarter were Nevada, Arizona, Florida and California, with Nevada leading the pack, RealtyTrac said.

It doesn't look to me like this issue is going to start resolving anytime soon.