4 States Top Forclosure List

V

valkyrie

Well-Known Member
Foreclosure leaders focused on 4 states in new metro list
* Catherine Clifford, CNNMoney.com staff writer
* Wednesday April 22, 2009, 9:47 am EDT

The 26 cities with the highest foreclosure rate in the nation are all located in four hard-hit states, with Las Vegas topping the list, according to a report released Wednesday.

Metro areas in California, Florida, Nevada and Arizona topped the foreclosure filing list for the first quarter of 2009 in a report from RealtyTrac, an online marketer of foreclosed properties. A foreclosure filing includes default papers, auction sale notices and repossessions.

Las Vegas had the highest rate of foreclosures of any city, with one in every 22 homes subject to a foreclosure filing in the first three months of the year. The rate of foreclosure filings was 4.5%, seven times the national average.

Merced, Calif., had the second highest rate, with Cape Coral-Fort Myers, Fla., Stockton, Calif., and Riverside-San Bernardino-Ontario, Calif., rounding out the top five.

"The metro areas with the highest levels of foreclosure activity in the first quarter of 2009 paint a picture of concentrated problems in a relatively small number of hard-hit areas," said James J. Saccacio, chief executive officer of RealtyTrac, in a written statement.

Foreclosure rates have been very high in the 4 key states throughout the bursting of the housing bubble, and so it was to be expected that cities from those states would pepper the top of the list.

However, it was a surprise to see the list so top heavy, according to Rick Sharga, senior vice president at RealtyTrac.

"The concentration of troubled metro areas within the hardest-hit states, candidly, was even more severe than we expected it to be," Sharga said. "The degree to which those four states dominated the rankings surprised even us."

New problem cities: Meanwhile, some metropolitan areas had a surge in foreclosures. Boise City-Nampa, Idaho, in 27th place, Provo-Orem, Utah, in 37th, and Charleston-North Charleston, S.C., in 51st were examples Sharga gave of areas that had particular strong gains in filings.

Sharga said the rise of foreclosures in additional regions indicates new factors influencing the housing market as the recession drags on.

"What we believe we are seeing is some of the areas with unemployment problems," said Sharga. "These are people living paycheck to paycheck and, when the paycheck is gone, suddenly they can't afford to make their mortgage payments."

The data for RealtyTrak's metro area foreclosure report is collected from 2,200 counties across the nation, and those counties represent more than 90% of the U.S. population. Some 203 areas are covered by the report.

Across the nation, foreclosure activity in the first quarter hit a record high, according to another RealtyTrac report issued last week. Total foreclosure filings reached 803,489 in the first three months of the year, the highest monthly and quarterly totals since RealtyTrac began reporting in January 2005.

The national report also found that the worst of the foreclosures were centralized in a handful of worst-hit states. California, Florida, Arizona, Nevada and Illinois accounted for nearly 60% of the total foreclosure activity in the first quarter, with 479,516 properties received foreclosure filings in those states.
Click to expand...
The top states (California, Florida, Arizona and Nevada) all had the highest level of real estate sales during the real estate boom. We all know that this was a bubble waiting to burst. Speculators in these states, buying up reasonably priced homes, helped to fuel the bubble.

I understand that not all the people bitten were speculators. Many of them simply lost their jobs. I remember massive layoffs were happening last summer, so if they were struggling along then this is about when they'd be losing their house.
 
One thing you'll notice about California in particular is that the areas hardest-hit by foreclosures (Inland Empire and the Central Valley) have more reasonable home prices than the Bay Area, Orange County, San Diego, Central Coast, etc. Yes, you have foreclosures in the $750K-up houses too, but a lot of the foreclosures are from when the banks were giving out loans to pretty much anyone, putting a husband working as a night stocker at Wal-Mart and a wife working as a cashier at Circle K into a $350K house with zero down. A $350K mortgage at 6.5 percent interest comes out to $2212.24 a month. If you figure the stocker job pays about $10 an hour and the Circle K job pays $8, that's $2,880 a month in income if both jobs are full-time.

Perhaps I exaggerated a bit too much in my numbers, but the point remains that people were being given mortgages that seemed "reasonable" compared to places like Malibu but were still out of reach for the income level.
 
Inkara1 said:
. A $350K mortgage at 6.5 percent interest comes out to $2212.24 a month. If you figure the stocker job pays about $10 an hour and the Circle K job pays $8, that's $2,880 a month in income if both jobs are full-time.
Click to expand...

and is anyone truly sympathetic to people STUPID enough to get themselves into such a ridiculous situation?
 
I'm sure prices will fall a little more, but we're assured that prices will rebound and climb back up again.
 
All,

When you read the thread title; was the first state that you imagined would be on that list California?
 
spike said:
I just bought a house a month or so ago. Hoping I got it at the bottom of the market.
Click to expand...
I think it depends on where the house is. Some prices are still falling in areas and some have leveled out. The houses in our area haven't really fallen much and aren't expected to fall anymore than they already have (if they have).
 
jimpeel said:
All,

When you read the thread title; was the first state that you imagined would be on that list California?
Click to expand...
Yes, because I had been following the bubble as it grew. Many of the houses in California were overpriced, even for California. There are other areas, such as Florida where I also had not been surprised. Speculators have been picking up condos and town homes for years and reselling them. Florida is another state with overpriced homes. My bro lives there and he and his wife can't buy a house anywhere close to where they both work, they can't afford it.
 
Inkara1 said:
One thing you'll notice about California in particular is that the areas hardest-hit by foreclosures (Inland Empire and the Central Valley) have more reasonable home prices than the Bay Area, Orange County, San Diego, Central Coast, etc. Yes, you have foreclosures in the $750K-up houses too, but a lot of the foreclosures are from when the banks were giving out loans to pretty much anyone, putting a husband working as a night stocker at Wal-Mart and a wife working as a cashier at Circle K into a $350K house with zero down. A $350K mortgage at 6.5 percent interest comes out to $2212.24 a month. If you figure the stocker job pays about $10 an hour and the Circle K job pays $8, that's $2,880 a month in income if both jobs are full-time.

Perhaps I exaggerated a bit too much in my numbers, but the point remains that people were being given mortgages that seemed "reasonable" compared to places like Malibu but were still out of reach for the income level.
Click to expand...

2minkey said:
and is anyone truly sympathetic to people STUPID enough to get themselves into such a ridiculous situation?
Click to expand...
Sympathetic to the stupid people? Yes and no.

When I looked for a house, the real estate agent looked at all income for the household, then said I could afford a much higher priced home than I thought I could afford. After looking at her math I realized that she had simply taken the net income, subtracted any monthly payments for other loans and obligations, a minimum amount for food, gas, utilities and the result was what she wanted us to put into a mortgage payment. There would be no savings, no buffer in case we had an emergency, no room for fluctuating gasoline prices, no doctors' visits, no clothing allowance, no weekly movie, nothing.

I imagine this is what happens when most anyone walks in looking for a real estate agent to help them find a house because I've heard this story before. Someone who is not on the ball might trust that real estate agent and buy a house they can not afford.

I don't blame the real estate agent alone. The fault lies with everyone. It lies with the buyer, who should have known better. It lies with the real estate broker, who definitely knew better. And it lies with the lender, who had full access to all the buyer's financial information and DEFINITELY should have denied the loan, whether they had good credit or bad, because they were not in a position to pay back the amount being requested.
 
but the primary fault here still lies with the idiot home buyers who did not take the time (as you did) to figure out what they'd be paying and to anticipate even the most basic of contingencies.

just because you CAN get a loan doesn't mean you should.

think these might be the same people carrying balances on their credit cards?
 
2minkey said:
but the primary fault here still lies with the idiot home buyers who did not take the time (as you did) to figure out what they'd be paying and to anticipate even the most basic of contingencies.

just because you CAN get a loan doesn't mean you should.

think these might be the same people carrying balances on their credit cards?
Click to expand...
I agree with you that just because you qualify for a loan doesn't mean you should take that loan. But I also believe that some of these loan brokers acted like con artists, convincing some of these people to take the loan so they could get their "American Dream". So it's a shared blame, and it should be a hard lesson to learn on both sides.
 
You must log in or register to reply here.
Back
Top