Foreclosure starts, the first step of an often lengthy process, already hit the one million mark this year, according to estimates from the Center for Responsible Lending.
The group expects foreclosure starts to hit a whopping 2.4 million in 2009, reducing the property values of 70 million households by a staggering $502 billion, or $7,200 per family.
“The escalation of foreclosures on all types of loans is alarming,” said Michael Calhoun, President of CRL, in a release. “It’s easy to think, ‘Well, that’s tough luck for the families that lose their homes.’”
“The truth is that foreclosures are costing neighboring families hundreds of billions of dollars and dragging down the entire economy. Foreclosures started today’s crisis, and foreclosures will keep the crisis going if this epidemic continues.”
Through 2012, the CRL expects foreclosures to rise to at least 9 million, costing 92 million families $1.9 trillion in lost home value.
Despite loan modifications ostensibly doing very little to slow defaults and foreclosures, the group called on loan servicers to ramp up such efforts to keep more families in their homes.
According to the CRL, a new foreclosure start happens every 13 seconds, amounting to about 6,500 a day, though not all of these will actually end up in foreclosure.