Foreclosures soaring in Utah

MIAMI — Utah had the fifth-worst rate of foreclosure filings among the states in 2009.

A record 2.8 million households nationwide were threatened with foreclosure last year, and that number is expected to rise this year as more unemployed and cash-strapped homeowners fall behind on their mortgages.

The number of households nationally that received a foreclosure-related notice rose 21 percent from 2008, RealtyTrac Inc. reported Thursday. One in 45 homes were sent a filing, which includes default notices, scheduled foreclosure auctions and bank repossessions.

Utah had the 13th-worst rate in the nation for 2008 and slipped to fifth-worst last year, with one in every 34 households reporting a foreclosure filing, putting the Beehive State above the national average of one in every 45 households.

Utah's foreclosure rate jumped nearly 83 percent over 2008 and almost 265 percent over 2007.

The report showed that 27,140 properties statewide recorded a foreclosure filing, equating to just under 3 percent of all households.

Nationwide in December, more than 349,000 households, or one in 366 homes, were hit with a foreclosure-related notice. That represents a 14 percent spike from November and a 15 percent jump from December 2008.

Banks repossessed more than 92,000 homes, up 19 percent from November. That increase was likely due to lenders working to clear their books at the end of the year, RealtyTrac said.

Stemming the tide of foreclosures is an important step for the real estate market and the economy to recover. Because foreclosures are usually sold at heavy discounts, they can lower the value of surrounding properties. Cities lose property tax dollars from empty foreclosures and declining home values, straining local economies. Home prices have stabilized in some cities but are still down 30 percent nationally from mid-2006.

The foreclosure crisis isn't letting up. Between 3 million and 3.5 million homes are expected to enter some phase of foreclosure this year, said Rick Sharga, senior vice president of Irvine, Calif.-based RealtyTrac, which began tracking the data five years ago.

High foreclosures forced the federal government and several states to come up with plans to prevent or delay foreclosures to help troubled borrowers.

"It was bad, but it could have been much worse, and it probably should have been worse," Sharga said.

One plan intended to help homeowners is the Obama administration's loan modification program known as Making Home Affordable. Lenders participating in the program have offered trial loan modifications to 760,000 eligible borrowers since it was launched in March. A loan modification changes the terms of the loan, such as lowering the interest rate, to make the monthly payments more affordable.