According to a recent RealtyTrac report, over than 860,000 properties were actually taken back by mortgage lender in REO’s that more than double the 2007 level.  In another article, Moody’s Economy, a research firm, predicted the number of homes lost to foreclosure will likely to increase by another 18 % this year before tapering off slightly through 2011.  Still, mortgage foreclosures which continue breaking records going back thirty years, according to the Mortgage Bankers Association will most likely continue foreclosing well above standard levels for years to come, and that will continue to keep home sale 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.

The annual RealtyTrac foreclosure report announced that 2.3 million American homeowners faced foreclosure proceedings last year, an 81 % increase from 2007, with the worst yet to come as consumers grapple with layoffs, shrinking investment portfolios and falling home prices.  This foreclosure report comes as Democrats, including President-elect Barack Obama, develop plans to use up to $100 billion of the remaining $350 billion in financial bailout money in an attempt to prevent the foreclosure crisis from blazing a fire burning homes across the country.  Loan modification programs have begun to show some positive results as FDIC Chairman, Sheila Bair stepped up to endorse a federal outline for loan workouts after banks like Indy Mac, Bear Stearns and Lehman Brothers started failing.

FDIC Chief: Foreclosure Plan Needed