The foreclosure crisis has entered a new phase. It’s spreading beyond the wreckage of the housing bubble to metro areas in Oregon, Idaho, Utah, Arkansas, Illinois, and South Carolina where unemployment is rising, according to RealtyTrac’s Midyear 2009 Metropolitan Foreclosure Market Report released this morning.
California, Florida, Nevada, and Arizona continue to have the highest foreclosure rates in the nation. But some parts of Michigan, Ohio, Indiana, and California are seeing improvement, the report said. “While some of the markets that had the highest saturation of foreclosures over the past few years have seen declining rates, new markets like Provo, Utah, and Boise, Idaho, have seen large increases,” James J. Saccacio, chief executive officer of RealtyTrac said in a prepared statement. “As unemployment rates increase in different parts of the country, it’s very likely that we’ll see similar patterns develop elsewhere.”
Unfortunately, the loan modifications being encouraged by the Obama Administration are being severely outpaced by new foreclosure starts. This graphic from the Center For Responsible Lending tells the story. The blue line represents the number of modifications. The yellow bars indicate the loans that are more than 60-days delinquent, and the red bars represent foreclosure starts.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.