Three states, California, Florida and Ohio, continue to dominate new foreclosure filings, as most of the nation saw increases in the third quarter, according to a new survey.With states like Ohio and Michigan firmly entrenched at the top of the foreclosure lists you begin to realize that its as much economic weakness as it is the subprime mortgage mess. Our manufacturing base is gone and reports like this solidify that fact.
During the period ended Sept. 30, 77 out of the nation's 100 largest metropolitan areas reported rises in delinquencies compared with the previous three months, according to the latest report from RealtyTrac, an online marketer of foreclosure properties.
The three most affected states reveal the two main causes of mortgage payment problems: economic weakness, as exemplified by Ohio, and speculative excess that led to high home prices and unaffordable mortgages, as represented by California and Florida.
In the past few months, the foreclosure story has become a tale of two regions. Some of the hardest-hit states have traditionally been in the Midwest, where plant closings and job losses have hit the economy there hard.This report only makes my prediction of a recession stronger. The Federal Reserve will do all it can to ward off recession until at least the next administration takes office. I feel sorry for the next President. The mess they are inheriting will be monumental.
The other region is the Sun Belt, which is showing even more significant foreclosure growth as out-sized price increases in the first half of the decade led to virtually unchecked real estate speculation.
According to the Center for Responsible Lending, 7.2 million households have subprime mortgages, and more than 14 percent of those are in default. It projects that one of every five of those loans issued in 2005 and 2006 will end in foreclosure, with 2.2 million families losing their homes.