Lost income and reduced wages make it increasingly difficult for consumers to stay current on mortgage payments during the recession.

Foreclosures spiked as a result, according to RealtyTrac, hitting a record 2.8 million filings last year. In addition to reaping havoc on consumers' morale and finances, this action can also trim hundreds of points off their credit scores and remain on their credit report for seven years.

The number of individuals who find themselves in this situation has not tapered off, despite improved real estate conditions. Earlier this month, RealtyTrac reported that foreclosure activity increased by 7 percent during the first quarter. This has continued into the spring, which March alone reporting a 19 percent increase in filings over the previous month.

The latest data from the foreclosed property marketplace show that cities hit hardest by the foreclosure crisis have found it difficult to recover. Ten of the top 20 cities with the highest foreclosure rate were located in California, while Florida was home to seven more. Nevada and Arizona made up the difference, according to the report.

Las Vegas held the number one spot on the list, with the number of foreclosure filings nearly five times the national average. The first quarter's 298,480 filings represented a 13 percent growth over the previous quarter, but were 19 percent lower than those during the first quarter of 2009.

Still, eight of the 10 metros with the highest foreclosure rates experienced a year-over-year decrease during the first quarter of 2010, according to the report.

"The decreasing foreclosure activity in some of the nation's top foreclosure hot spots in the first quarter is largely the result of government intervention and other non-market effects, and not a sure signal that those areas are out of the woods yet when it comes to foreclosures, "James Saccacio, CEO of RealtyTrac, said.

These government efforts include the Home Affordable Modification Program and Home Affordable Refinance Program. These were launched by the US Department of the Treasury last spring in order to give distracted homeowners an alternative to foreclosure. HAMP has enabled more than 230,000 to receive permanent definitions to their mortgages, according to the Treasury.

Those who do not qualify for federal assistance may turn to a short-sale or deed-in-lieu foreclosure, which are less financially harmful than foreclosure. These alternatives, however, are likely to have the same amount of damage on one's credit score.

Source by Krystle Chan