From Finance, Insurance and Real Estate News:

The number of bank repossessions of homes this year could top one million despite tens of billions of federal dollars that have been spent to keep people from losing their homes. That’s the report from RealtyTrac Inc., which publishes the nation’s largest database of foreclosure, auction, and bank-owned homes.

RealtyTrac’s Midyear 2010 U.S. Foreclosure Market Report, issued in July, shows 1,961,894 foreclosure filings — default notices, auction sale notices and bank repossessions — were reported on 1,654,634 U.S. properties in the first six months of 2010. This is down 5 percent from the previous six months but an 8 percent increase in total properties from the first six months of 2009.

One in 78 housing units in the U.S. received at least one foreclosure filing in the first half of the year, according to RealtyTrac. Of the 1.2 million homeowners who have gone into the Obama administration’s $75 billion mortgage assistance program, approximately one-third have dropped out.

“The midyear numbers put us on pace to exceed three million properties with foreclosure filings by the end of the year, and more than one million bank repossessions,” said RealtyTrac chief executive James J. Saccacio. “The roller coaster pattern of foreclosure activity over the past 12 months demonstrates that while the foreclosure problem is being managed on the surface, a massive number of distressed properties and underwater loans continue to sit just below the surface, threatening the fragile stability of the housing market.”

Areas where housing prices shot up highest during the real estate boom are being hit hardest in the bust. Nevada, Arizona and Florida have the highest foreclosure rates (percent of homes in foreclosure), and California, Florida and Arizona have the highest numbers of foreclosures.

Experts are not seeing any relief anytime soon. The key problem is not just unemployment but a crash in property values that makes it less likely home owners will do everything possible to keep their houses, including renting out. Many people are cutting their losses and moving on with what cash they can rather than continue dumping money into a pit that they will never be able to resell.

Of course people thinking that their house was an investment and not a place to live was how we got into this mess in the first place.