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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Foreclosures could reach 1 million

First half of year ahead of 2009 pace

Alex Veiga Associated Press

LOS ANGELES – More than 1 million American households are likely to lose their homes to foreclosure this year, as lenders work their way through a huge backlog of borrowers who have fallen behind on their loans.

Nearly 528,000 homes were taken over by lenders in the first six months of the year, a rate that is on track to eclipse the more than 900,000 homes repossessed in 2009, according to data released today by RealtyTrac Inc., a foreclosure listing service.

“That would be unprecedented,” said Rick Sharga, of RealtyTrac.

By comparison, lenders have historically taken over about 100,000 homes a year, Sharga said.

The pace at which new homes falling behind in payments and entering the foreclosure process has slowed as banks continue to let delinquent borrowers stay longer in their homes rather than adding to the glut of foreclosed properties. At the same time, lenders have stepped up repossessions in an effort to clear out the backlog of distressed inventory on their books.

The number of households facing foreclosure in the first half of the year climbed 8 percent versus the same period last year, but dropped 5 percent from the last six months of 2009, according to RealtyTrac, which tracks notices for defaults, scheduled home auctions and home repossessions.

In all, about 1.7 million homeowners received a foreclosure-related warning between January and June. That translates to one in 78 U.S. homes.

On average, it takes about 15 months for a home loan to go from being 30 days late to the property being foreclosed and sold, according to Lender Processing Services Inc., which tracks mortgages.

Assuming the U.S. economy doesn’t worsen, Sharga projects it will take lenders through 2013 to resolve the backlog of distressed properties they have on their books right now.

There are more than 7.3 million home loans in some stage of delinquency, according to Lender Processing Services.

Among states, Nevada posted the highest foreclosure rate in the first half of the year. One in every 17 households there received a foreclosure notice. However, foreclosures there are down 6 percent from a year earlier.