3. FORECLOSURES HEAD HIGHER: Home foreclosures top 4 million, as more people lose their jobs and can't afford to pay their mortgages. As a result, increasing numbers of people with fixed-rate loans and good credit are losing their homes.

The Obama administration's plan to help financially strapped homeowners, announced in March, results in 680,000 loan modifications, far short of the government's goal of up to 4 million.

By the end of the year, a record 14 percent of homeowners with a mortgage are either behind on their payments or in foreclosure. Bargain-priced foreclosures are dragging down home values in neighborhoods across the country. Nationwide, American homeowners have lost $4 trillion in home equity since the housing bust.

4. WALL STREET CLAWS BACK: In March, major stock indexes tumble to 12-year lows. Then the fever breaks. Seven months later, in October, the Dow Jones industrial average is back above 10,000 and still advancing. In the nine months since the turnaround took hold, the Dow scoops about 3,900 points, or 59.5 percent, on signs that layoffs are slowing, corporate profits are climbing and factories are producing more.

5. SMALL AND MID-SIZE BANKS FAIL: 140 banks collapse as consumer loan losses keep rising and commercial real estate loans sour. It's the biggest number in any year since 181 banks failed in 1992 at the end of the savings-and-loan crisis.

The banks have been undone by real estate, construction and industrial loans that soured as the recession has deepened. Defaults are up as developers abandon failing projects and landlords can't meet their loan payments.

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