Delinquencies, foreclosures likely to put a damper on 2010 recovery

March is usually the month when people in the real estate business start getting hopeful. Spring usually brings out both buyers and sellers and, along with them, higher values for most homes.

But for some of the biggest housing markets in the country, those hopes look to be in vain this year. The problem is the glut of homes that have been repossessed by banks or that seem headed in that direction. The glut is far bigger than it was a year ago.

In fact the outlook is flat-out grim, based on the latest data from First American CoreLogic, a housing data firm that tracks 97% of U.S. transactions for the mortgage industry. The percentage of homes that banks have filed foreclosure on or repossessed (and stamped with the dreaded “REO,” or “real estate owned,” moniker) now account for 3% of all mortgaged homes. That’s up from 2.2% a year ago. In some large cities, the rate is two-to-six times the national average.

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