US foreclosures up 57% in January

Exactly 233,001 homes received at least one notice about overdue payments last month, compared with 148,425 in January 2007, US property site RealtyTrac said.

There was a 90% increase in the number of houses being repossessed by banks compared with January 2007.

The figures come despite attempts by lenders to modify loan terms and work

out long-term repayment plans.

"The loan workout modification programmes aren't having a significant material effect on keeping properties from going back to the banks," said Rick Sharga from RealtyTrac.

Prices falling

Lenders were increasingly forced to take possession of homes instead of auctioning them, suggesting that the owners had very little equity in their houses.

There was further bad news from figures showing that US house prices fell for the second quarter in a row.

House prices fell 1.3% in the last three months of 2007, compared with the previous three months, according to the Office of Federal Housing Enterprise Oversight.

They fell 0.3% compared with the last three months of 2006.

The figures came as the chief economist of the mortgage finance company Freddie Mac warned of falling house prices and rising foreclosures for the next two years.

"2008 is not going to be a pretty year," Frank Nothaft said.

"We'll see some improvement in 2009, but not for house prices."

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