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Recently, U.S. home seizures rose a record 38 percent as banks processed backlogs.  A record 269,962 U.S. homes were seized from delinquent owners in the second quarter as lenders set a pace to claim more than one million properties by the end of 2010, according to RealtyTrac Inc.  Home seizures climbed 38 percent from a year earlier and five percent from the first quarter, the Irvine, California-based data company said in a July 15 statement. More than 1.65 million properties received a foreclosure filing, including notices of default, auction, and bank repossession, in the first half of 2010. That was up eight percent from the first six months of 2009.

“Foreclosures haven’t peaked yet,” Nicolas Retsinas, director of Harvard University’s Joint Center for Housing Studies in Cambridge, Massachusetts, said in a telephone interview. Unemployment suggests that bank repossessions may climb for another six to nine months, he said.  Waning consumer confidence and the jobless rate, which was 9.5 percent in June, are holding back a housing recovery. The expiration of a federal tax credit for home buyers also cut demand, even as average borrowing costs for a 30-year fixed-rate loan set record lows. The rate was 4.57 percent last week, according to McLean, Virginia-based mortgage finance company, Freddie Mac.

“It’s not interest rates that will get us out of this, but jobs, Retsinas said. New defaults seem to have stabilized, but there’s still a lot of volatility overall.”

One in 78 U.S. households received a foreclosure filing in the first half of the year, and filings surpassed 300,000 for the 16th consecutive month in June, RealtyTrac said.   Lenders seized a total of 529,633 homes — the final stage of the foreclosure process — in the first half of 2010, said Daren Blomquist, the data firm’s marketing manager.

In some cases, banks are trying to avert foreclosure by modifying loans or attempting short sales, a situation in which a property is sold for less than the amount owed. That’s pushing down the number of new default notices even as lenders “clear out a backlog” and seize more homes, James J. Saccacio, RealtyTrac’s chief executive officer, said in the statement.

The number of properties that got a filing from April through June totaled 895,521, a four-percent drop from the previous quarter and barely changed from one year ago. Total filings for the year are forecast to exceed three million, according to the data company.

“While the foreclosure problem is being managed on the surface, a massive number of distressed properties and underwater loans continues to sit just below the surface, threatening the fragile stability of the housing market,” Saccachio said.

In the United States, Nevada had the highest foreclosure rate, as one in 17 households received a filing in the first half of 2010. The number of properties that got a notice totaled 64,429, down 13 percent from the previous six months and six percent from a year ago.

Arizona ranked second at one in thirty households, and Florida was third at one in thirty-two. Rounding out the ten highest rates were California, Utah, Georgia, Michigan, Idaho, Illinois, and Colorado.  California led in total filings as 340,740 properties got a notice, down fifteen percent from the previous six months and almost thirteen percent from a year earlier, according to RealtyTrac.

Florida was second with 277,073 properties, down nine percent from the previous six months and up three percent from the first half of 2009. Arizona was third at 91,484, down almost two percent from the previous period and up by a similar proportion from a year earlier.

Other states among the ten highest totals were Illinois at 85,223; Michigan at 78,509; Georgia at 71,949; Texas at 64,883; Nevada at 64,429; Ohio at 59,927; and New Jersey at 36,542.

RealtyTrac sells default data from more than 2,200 counties, representing 90 percent of the U.S. population.

Adapted from an article by Dan Levy, July 15, 2010.  You can email him at dlevy13@bloomberg.net.