Foreclosures Up 24 Percent in 1st Qtr

The number of American households threatened with losing their homes grew 24 percent in the first three months of this year and is poised to rise further as major lenders restart foreclosures after a temporary break.

In March, more than 340,000 properties were affected nationwide, up 17 percent from February and 46 percent from a year earlier.

The big unknown for the coming months, however, is President Barack Obama’s plan to help up to 9 million borrowers avoid foreclosure through refinanced mortgages or modified loans. The Obama administration expects its plans to make a big dent in the foreclosure crisis. But it remains to be seen whether the lending industry will fully embrace it, despite $75 billion in incentive payments.

In the coming months, there are still likely to be increased foreclosures, especially from vacant houses, second homes and those owned by speculators. None of those properties will qualify for a loan modification. However, overall foreclosures could start to decrease this summer. But even industry executives who emphatically support the plan emphasize that its success isn’t guaranteed. Plus, the lending industry has been swamped by the unprecedented wave of calls from distressed borrowers.