Foreclosures rumble on but growth rate hits lowest level for four years

Washington: The US foreclosure crisis isn't over, but the pace of growth may finally be slowing down.

RealtyTrac Inc. said Wed-nesday that the number of US households facing foreclosure in February grew six per cent from the year-ago level, the smallest annual increase in four years.

More than 308,000 households, or one in every 418 homes, received a foreclosure-related notice, the Irvine, California-based foreclosure listings company reported. That was down more than two per cent from January

Still, fears remain about the hundreds of thousands of homeowners who are still being evaluated for help under loan modification programmes. Many analysts say most of those borrowers will eventually lose their homes, sparking a new round of foreclosures later this year.

"It's premature to declare victory just yet," said Rick Sharga, a RealtyTrac senior vice president. He did, however, allow that, "If this is the beginning of a slowdown in growth rates, that would be a good thing".

Banks repossessed nearly 79,000 homes last month, down 10 per cent from January but still up six per cent from February 2009.

The RealtyTrac report follows an encouraging report last month from the Mortgage Bankers Association. It said the percentage of borrowers who had missed just one payment on their home loans fell to 3.6 per cent in the October to December quarter, down from 3.8 per cent in the third quarter.

While that was a surprising piece of positive news, foreclosures were still at record high levels. The number of borrowers who have either missed a payment or are in foreclosure was at 15 per cent.

A record 2.8 million households were threatened with foreclosure last year, RealtyTrac said, and the number is expected to rise to more than three million homes this year.

The foreclosure crisis forced the federal government and several states to come up with plans to prolong the process so delinquent borrowers can try to find help. But those efforts have barely dented the problem. Case in point: The Obama administration's $75 billion (Dh275 billion) foreclosure prevention program has helped only 116,300 homeowners in the past year.