Mortgage firms initiated a record 3.8 million in foreclosure-related actions in 2010, including filing notices of default, scheduling auctions, and repossessing homes according to new figures released by RealtyTrac, Irvine, Calif.

Compared to 2009, foreclosure-related actions rose 2% from 2009, and 23% compared to two years ago.

Not all NODs result in a consumer losing their house.

Five states accounted for 51% of foreclosure activity in 2010: California, Florida, Arizona, Illinois and Michigan. Combined, these states accounted for almost 1.5 million properties receiving a foreclosure filing during the year.

"Total properties receiving foreclosure filings would have easily exceeded 3 million in 2010 had it not been for the fourth quarter drop in foreclosure activity — triggered primarily by the continuing controversy surrounding foreclosure documentation and procedures that prompted many major lenders to temporarily halt some foreclosure proceedings," said RealtyTrac CEO James Saccacio. "Even so, 2010 foreclosure activity still hit a record high for our report, and many of the foreclosure proceedings that were stopped in late 2010 — which we estimate may be as high as a quarter million — will likely be re-started and add to the numbers in early 2011."

Foreclosure filings were reported on 257,747 properties in December, a decrease of nearly 2% from the previous month and down 26% from December 2009 — the biggest annual drop in foreclosure activity since RealtyTrac began publishing its foreclosure report in January 2005.

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