(AP) —The number of Illinois properties facing foreclosure increased 15.4% last year, a much sharper rise than the country saw, according to a report.
Properties in the state received 151,304 foreclosure-related filings in 2010, according to a report released Thursday by Irvine, Calif.-based online distressed-property listing firm RealtyTrac Inc.
Only Arizona, California, and Florida had more total filings.
In Illinois, one in every 35 homeowners received a notice of foreclosure last year, the ninth-highest rate in the U.S., according to Irvine, Calif.-based RealtyTrac.
In the U.S., one in 45 households received a foreclosure-related filing last year, up 1.67% percent from 2009.
Illinois was one of five states — along with California, Florida, Arizona and Michigan — that together accounted for more than half of the country's foreclosure activity last year. In these states, a combined total of almost 1.5 million households receiving a filing, despite year-over-year decreases in California, Florida and Arizona.
And the bleakest year in the country's foreclosure crisis has only just begun.
Lenders are poised to take back more homes this year than any other since the U.S. housing meltdown began in 2006. About 5 million borrowers are at least two months behind on their mortgages and more will miss payments as they struggle with job losses and loans worth more than their home's value, industry analysts forecast.
"2011 is going to be the peak," said Rick Sharga, a senior vice-president at RealtyTrac.
The outlook comes after banks repossessed more than 1 million homes in 2010, RealtyTrac said Thursday. That marked the highest annual tally of properties lost to foreclosure on records dating back to 2005.
The pace slowed in the final two months of 2010 as banks reviewed their foreclosure processes after allegations surfaced in September that evictions were handled improperly. Under increased scrutiny by the government, lenders temporarily halted taking actions against borrowers severely behind on their payments.
However, most banks have since resumed their eviction processes, and the first quarter will likely show a rebound in foreclosure activity, Sharga said.
Foreclosures are expected to remain elevated through the year as homeowners contend with stubbornly high unemployment, tougher credit standards for refinancing and falling home values. Sharga said he expects prices to dip another 5 percent nationally before finally bottoming out. The decline will push more borrowers underwater on their mortgages. Already, about one in five homeowners with a mortgage owe more than their home is worth.
The pain likely will be the most acute in states that have already been hit hard. That includes former housing boom states Nevada, Arizona, Florida and California, along with states that are suffering most from the economic downturn, including Michigan and Illinois.
Nevada posted the highest foreclosure rate in 2010 for the fourth straight year, despite a 5 percent decline in activity from the year before. One in every 11 households received a foreclosure filing last year in the state. In December, foreclosure activity increased 18 percent from November with a 71 percent spike in bank repossessions.
Arizona and California also showed sharp December increases in the number of homes banks took back, at 52 percent and 47 percent, respectively. Arizona, along with Florida, finished the year at No. 2 and No. 3 for the highest foreclosure rates.
RealtyTrac tracks notices for defaults, scheduled home auctions and home repossessions — warnings that can lead up to a home eventually being lost to foreclosure.
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