Final answer:
Foreclosures peaked during the Great Recession of 2008, following a housing market boom that saw its peak in 2005, according to the provided historical context.
Step-by-step explanation:
Foreclosures reached their peak during the Great Recession of 2008, which was a result of a deregulated bond market and risky mortgage innovations that culminated in a real estate boom reaching its pinnacle in 2007. This period of economic hardship saw the threatened collapse of banks and investment houses, leading to the administration stepping in with financial aid.
The wave of foreclosures and job losses during this time left many Americans in distress, particularly as the housing market transitioned from a boom between 1990 and 2006 to a bust, with single-family home sales peaking in 2005 at 107,000 units before the subsequent decline. It is important to note that no option provided in the original question correctly dates the peak of foreclosures; therefore, the information provided points to an event that occurred outside the years listed.