Loan help starts on foreclosure wave
Sign outside a house in Pasadena, Calif. indicates a reduced sale price
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Steve Chiotakis: Staying on the housing theme, this morning RealtyTrac reports the number of homeowners who've received at least one foreclosure notice went up big time over last year. The first quarter jump over last year was 24 percent. And the news comes as President Obama released the latest details on his plan to help people modify loans. Here's Marketplace's Dan Grech.
Dan Grech: The Treasury this week finally launched its $75 billion program to keep 9 million borrowers in their homes. And what do analysts predict will be the first big impact of the program?
Jack McCabe: We still have the biggest wave of foreclosures yet to hit.
That's Jack McCabe of McCabe Research and Consulting. He says many banks put a hold on foreclosures until the details of the Obama plan were released. Now those banks will begin foreclosing on properties that don't qualify for the program: vacant houses, second homes and places owned by speculators.
McCabe predicts this wave of foreclosures will start to drive more bank failures, adding to the two dozen we've already had this year.
McCabe: It's my projection that by the end of the year, that number will be well over 200 and could be considerably higher.
He says the rise in foreclosures in places like Florida, Arizona and California also means housing prices there haven't yet hit bottom.
Chiotakis: That was Dan Grech reporting.