More than 2.3 million American homeowners faced foreclosure proceedings last year, an 81 percent increase from 2007, with the worst yet to come as consumers grapple with layoffs, shrinking investment portfolios and falling home prices.
Nationwide, more than 860,000 properties were actually repossessed by lenders, more than double the 2007 level, according to RealtyTrac, a foreclosure listing firm based in Irvine, California, which compiled the figures.
Moody's Economy.com, a research firm, predicts the number of homes lost to foreclosure is likely to rise by another 18 percent this year before tapering off slightly through 2011.
Meanwhile, Senate Majority Leader Harry Reid said the Senate would vote Thursday on a request by President-elect Barack Obama to release the remaining $350 billion of the financial bailout fund to expand lending to consumers, small businesses and municipalities and to reduce the rising rate of foreclosures.
Obama's economic team lobbied for votes Wednesday night. His advisers offered assurances that the money from the Troubled Asset Relief Program would be spent differently than it was under President Bush.
Lawmakers who met privately with Obama emissaries on Wednesday said after the discussions that Obama would spend the remaining $350 billion of the financial bailout fund on expanded lending and reducing foreclosures, and would not use the money to help other industries.
Foreclosures - which keep breaking records going back 30 years, according to the Mortgage Bankers Association - are likely to remain well above normal levels for years to come, and that will continue to keep home prices from rebounding.
"Hitting bottom is a lot different than coming off the bottom," said Christopher Thornberg, a principal with Beacon Economics in Los Angeles.
Commenting Wednesday in his column, "Other People's Money," CNET Political Editor Declan McCullagh argued that politicians should resist populist pressure to bailout Americans who took out mortgages on homes they could not afford. "This is not politically correct to say, but the reality is that not everyone can afford a house," said McCullagh.
The four states with the highest foreclosure rates last year were Nevada, Florida, Arizona and California.
More than 1.1 million properties in those four states received a foreclosure notice, almost half the national total. And more than one in five of those households were in California, which is coping with massive job losses in the housing and mortgage industries as well as a rapid decline in home prices.
In December, more than 303,000 properties nationwide received at least one foreclosure notice, up more than 40 percent from a year earlier and up 17 percent from November, according to RealtyTrac.
Nearly 79,000 properties were repossessed by lenders in December, a 61 percent increase over a year ago.