Banks repossessed a record one million homes in the United States in 2010.
Foreclosure tracker RealtyTrac said about five million homeowners were at least two months behind on their mortgage payments.
The group said foreclosures are likely to remain numerous while unemployment remains stubbornly high.
Among the worst hit states were Nevada, Arizona, Florida and California, once at the heart of the housing boom.
The BBC reports Nevada had the highest foreclosure rate for the fourth consecutive year, with one in 11 housing units receiving a foreclosure notice.
RealtyTrac said more than half the foreclosures occurred in Arizona, California, Florida, Illinois and Michigan.
The group said 2.9 million US households were subject to a foreclosure filing last year, up 1.67% from 2009.