Second Quarter Foreclosures Skyrocket

Latest Data Shows 17% Spike
After 90,696 foreclosures were completed in the first quarter of 2009, federal and state officials certainly hoped to see a downward trend as the year continued and programs like the Making Homes Affordable plan were implemented. Nevertheless, it came as no great shock that the second quarter was worse than the first, as the foreclosure rate jumped nearly 17% to 106,007, this according to the Office of Thrift Supervision and the Office of the Comptroller of the Currency.

Even though some people have staved off foreclosure with government help (actions designed to keep people in their homes rose more than 20%, as well), high unemployment numbers, diminishing equity and an end to foreclosure moratoriums all contributed to the increase in numbers.

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To be sure, the situation is drastically different in areas that have been hit hard by the foreclosure crisis. Additionally, some areas that were not part of the sub-prime crisis but were later affected by high unemployment when the general economy stalled are also hotbeds for foreclosure activity. These are the areas that need the most help, and these are the areas also at the most risk for more trouble courtesy of adjustable loans and more snowballing effects from underwater homeowners.

Lawmakers appear eager to ratchet up some more pressure on the lenders, as new legislation hit the Senate floor Wednesday that would require banks to offer loan modifications or foreclosure mediation.

Perhaps the most telling sign of what is to come, though, is that loan delinquencies were up across the board. Prime loans, sub-prime loans. Fixed rates, Option ARMs. The totals are all very clear on the matter. Unless something extraordinarily positive rights the economy or the government can find a safety net made of stronger fabric, there is sure to be another wild flurry of foreclosures in the coming months.