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We have new numbers on foreclosures this morning, and they signal more trouble ahead. Lenders are on track to take back more homes this year than any other year since the recession began. Realty Trac says last year, banks repossessed just over a million homes — about 15 percent more than in 2009.
Marketplace’s Mitchell Hartman has more.
Mitchell Hartman: In the fourth quarter alone, 230,000 homes were to foreclosure. And that was actually during a lull. Major banks halted home seizures temporarily, while they investigated legal problems with paperwork, says Ted Gayer at the Brookings Institution.
Ted Gayer: There’s still a clearing going on of the housing market that got delayed through the foreclosure pauses that took place, and that’s going to be costly and time-consuming for the banks to work through.
But work through, they will, says Gayer. There’s really no alternative, with the government’s loan modification program falling short and so many people no longer paying their mortgages.
Gayer: Certainly it’s the case that the very weak labor market is causing problems in foreclosures and people’s abilities to pay. And I think if you’re making forecasts about when the foreclosure numbers will diminish, you have to look at what’s going to happen in the labor markets.
Unemployment’s not expected to fall to pre-recession levels for years. RealtyTrac predicts a quarter-million more homeowners will enter foreclosure in coming months.
I’m Mitchell Hartman for Marketplace.
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