Economy Watch: Record Foreclosures in 2010
- Jan 14, 2011
January 14, 2011
By Dees Stribling, Contributing Editor
RealtyTrac reported that more than 3.82 million foreclosure filings—default notices, scheduled auctions and bank repossessions—were reported on 2.87 million U.S. residential properties in 2010, an increase of nearly 2 percent from 2009 and an increase of 23 percent from 2008. Some 2.23 percent of all U.S. housing units (one in 45) received at least one foreclosure filing during the year, up from 2.21 percent in 2009; 1.84 percent in 2008; 1.03 percent in 2007; and 0.58 percent in 2006.
Nevada retained the dubious distinction of having the most foreclosed properties in the nation. More than 9 percent of Nevada housing units (one in 11) received at least one foreclosure filing in 2010, giving it the highest state foreclosure rate for the fourth consecutive year despite a 5 percent decrease in foreclosure activity from 2009. Arizona came in second for the second year in a row, with 5.73 percent of its housing units (one in 17) receiving at least one foreclosure filing in 2010, and Florida was next, with 5.51 percent of its housing units (one in 18) receiving at least one foreclosure filing during the year.
“Total properties receiving foreclosure filings would have easily exceeded 3 million in 2010 had it not been for the fourth quarter drop in foreclosure activity, triggered primarily by the continuing controversy surrounding foreclosure documentation and procedures that prompted many major lenders to temporarily halt some foreclosure proceedings,” James J. Saccacio, CEO of RealtyTrac, said in a statement. “Even so, many of the foreclosure proceedings that were stopped in late 2010—which we estimate may be as high as a quarter million—will likely be re-started and add to the numbers in early 2011.”
Barofsky Warns of Future Bailouts
Neil Barofsky, the special inspector general for the Troubled Asset Relief Program, released a 77-page report that touched on the perils of “too big to fail.” The report posited that mass bailouts could well happen again someday, despite the Dodd-Frank financial reform law passed last year.
“The market still gives the largest financial institutions an advantage over their smaller counterparts by enabling them to raise funds more cheaply, and enjoy enhanced credit ratings based on the assumption that the government remains as a backstop,” the report said, encapsulating a number of ideas, including moral hazard.
On the other hand, Barofsky’s report also said that in the case of Citigroup at least, the bailout proved to be the right thing to do, moral hazard or not. It wasn’t precisely a rational calculation, however, but rather one based on “on gut instinct and the fear of the unknown.”
Jobless Claims Rise in First Week of 2011
Jobless claims were higher than expected for the week ended Jan. 8, rising 35,000 to 445,000, according to the U.S. Department of Labor. That could either be a stumble in the job-growth acceleration that’s been seen lately, or a post-holiday fluke.
Wall Street didn’t much care for those numbers, it seems, but there wasn’t a panic. The Dow Jones Industrial Average lost 23.54 points, or 0.2 percent, while the S&P 500 dropped 0.17 percent and the Nasdaq edged down 0.07 percent.