Home foreclosures jump in previously untouched cities
Two of the three areas that have been hardest hit since the crisis began actually saw drops in the number of properties receiving foreclosures in the third quarter. Foreclosure activity in Merced, Calif., decreased by 13 percent from the previous quarter, though even with that drop, it had the nation's second-highest foreclosure rate, at 3.72 percent or one in 27 housing units receiving a foreclosure filing during the third quarter. Cape Coral-Fort Myers, Fla., also saw a decrease in foreclosure activity of 5 percent from the previous quarter. It has the third-highest foreclosure rate nationwide at 3.67 percent.
"Rising unemployment and a new variety of mortgage resets continued to gradually shift the nation's foreclosure epicenters in the third quarter away from the hot spots of the last two years and toward some metro areas that had avoided the brunt of the first foreclosure wave," said James J. Saccacio, chief executive officer of RealtyTrac, in a press release. "While toxic subprime mortgages drove much of that first wave of foreclosures, high unemployment and exotic Alt-A Option ARMs are spreading the foreclosure flood to more metro areas in 2009."
Other metro areas that saw dramatic spikes in their foreclosures rates include Reno-Sparks, Nev., with an 80 percent year-over-year increase in foreclosure activity; Prescott, Ariz., with a 77 percent increase; Jacksonville, Fla., with a 64 percent increase; Rockford, Ill., with a 64 percent increase; and Lansing-East Lansing, Mich., with a 41 percent increase.
Ground zero of the foreclosure crisis is still Las Vegas, with the highest rate in the nation: Its foreclosure rate of 5.13 percent means that about one in 20 housing units there received a foreclosure filing during the third quarter -- nearly seven times the national average. A total of 40,408 Las Vegas area properties received foreclosure filings during the quarter, up 9 percent from the previous quarter and an increase of 54 percent over the third quarter of 2008.
We may finally be seeing some success from the Obama administration's mortgage modification program now that the banks have ramped up their staffing. But clearly the foreclosure problem is spreading and moving up-market. Hopefully, banks will go even further than they have, committing even more resources to mortgage modification efforts in order to stem the ever-rising tide of foreclosures.
Lita Epstein has written more than 25 books, including The 250 Questions You Should Ask to Avoid Foreclosure.