Foreclosures up: 1 in 84 homes affected in first half of year

ByABC News
July 16, 2009, 4:38 AM

— -- Foreclosures are continuing to set records despite the Obama administration's $75 billion plan to help borrowers at risk of losing their homes.

There were 1.9 million foreclosure filings in the first six months of this year, a 15% increase from the first six months of 2008, according to a report today from RealtyTrac. One in 84 homes received a foreclosure filing in the first half of the year.

The administration is taking steps to improve the effectiveness of its mortgage modification program, but millions of Americans still face foreclosure even if it is a "total success," a senior Treasury official said Thursday.

Herbert Allison, Treasury assistant secretary for financial stability, told the Senate Banking Committee that 325,000 trial modifications have been offered to borrowers under the Home Affordable Modification Program since its launch around five months ago.

But he said the program had limits.

"This plan will not save every home," Allison added. "Even if HAMP is a total success, we should expect millions of foreclosures, as President Obama noted when he launched the program in February."

June was the fourth consecutive month that foreclosure filings surpassed 300,000, RealtyTrac says, and the number of properties receiving one or more filings in the second quarter totaled 889,829 the highest since RealtyTrac began issuing its report in 2005.

Foreclosure filings include default notices, auction sale notices and bank repossessions.

"The Obama plan doesn't seem to be having a significant effect," says Mark Zandi at Moody's Economy.com. "I don't think it's going as well as they'd hoped for. Foreclosures will continue to rise through the end of the year."

California led the states with the most foreclosure filings in the first half of 2009 391,611. That was 2.94%, or one in 34, of California's homes.

Foreclosures are growing as more Americans lose their jobs or take pay cuts. The federal effort to help at-risk homeowners includes giving lenders financial incentives to modify mortgages with more affordable terms.