Foreclosures up 6%. That's good news . . . or not

WASHINGTON - The foreclosure crisis isn't over, but the pace of growth may finally be slowing down.

RealtyTrac Inc. said yesterday that the number of U.S. households facing foreclosure in February grew 6 percent from a year ago, the smallest annual increase in four years. On the state level, foreclosures declined on a monthly and yearly basis in the hard-hit states of Nevada, Arizona and California, but still grew rapidly in Florida.

More than 308,000 households, or one in every 418 homes, received a foreclosure-related notice, the Irvine, Calif.-based foreclosure listings company reported. That was down more than 2 percent from January

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

Banks repossessed nearly 79,000 homes last month, down 10 percent from January but still up 6 percent from February 2009.

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

A record 2.8 million households were threatened with foreclosure last year, RealtyTrac said, and the number is expected to rise to more than 3 million homes this year.

Economic woes, such as unemployment or reduced income, are expected to be the main catalysts for foreclosures this year.