Foreclosures, Up 21% in 2009, Are Still Climbing

In 2009, millions of struggling American homeowners waited in vain for mortgage relief. It never came.

When 2009 began, millions of American homeowners hoped that the worst of the real estate crisis was behind them. They were wrong.

Instead of declining, the number of foreclosed homes in the U.S. last year increased to a record 2.8 million, a 21% rise over 2008 and 120% over 2007, according to a new report from Irvine (Calif.)-based RealtyTrac. 2010 may not be much better.

The problem was that millions of adjustable-rate mortgages began to reset last year, causing monthly mortgage payments to soar while at the same time the value of these homes tanked. The help that many struggling homeowners had hoped would come from the federal government's Home Affordable Modification Program never came. Herb Allison, the U.S. Treasury Dept.'s assistant secretary for financial stability, expects fewer than half of the 3.2 million homeowners targeted by the Obama Administration to qualify for the program. Too often, facing bankruptcy or eviction, and finding they owed more than their homes were worth, people simply walked away.