While housing markets across the country are recovering from the foreclosure crisis, others are just stumbling into it and they aren’t exactly the places one would expect.
States like Maryland, Oregon and New Jersey, which maintained relatively stable markets after the housing bubble popped, saw new foreclosure filings climb by double- and triple-digit percentages in July, according to RealtyTrac.1
In Maryland, for example, new foreclosure filings rose 275% compared with a year earlier. When it came to overall foreclosure activity, including default notices, scheduled auctions and bank repossessions, the state had this second highest foreclosure rate in the nation, after default-riddled Florida.1
Oregon saw new foreclosure filings surge 137% and New Jersey’s foreclosure starts spiked 89% from one year ago.
“So what is happening? In many of these cases, early government intervention aimed at helping these markets is now coming back to haunt them, says Daren Blomquist, RealtyTrac’s spokesman.
Foreclosures are continuing to boil over in a select group of markets where state legislation and court rulings kept a lid on foreclosure activity during the worst of the housing crisis,” he said.”1
After the housing bubble popped, Virginia’s government didn’t try to stop many of the defaulting loans from working their way through foreclosure process. While the hit was painful at first — by the end of 2008, the state had the 10th highest foreclosure rate in the nation — the market has gotten back on its feet more quickly.
“Meanwhile in Maryland, an aggressive effort by the state to make sure all foreclosures were handled properly during the housing crisis saved a lot of people’s homes but it also postponed a lot of inevitable foreclosures. Now the banks are catching up.
The states that saw the largest spikes in foreclosures last month are New Jersey and Rhode Island.
Oregon is classified as a non-judicial state, but that status changed for many mortgages in the wake of the robo-signing scandal, which revealed that banks were playing fast and loose with foreclosure paperwork. Oregon then insisted that foreclosures on mortgages that had gone into an electronic tracking system called the Mortgage Electronic Registration System (MERS), which the robo-signing abuses were centered around, had to be approved by a court.”1
But there were some bright spots: States like California, Illinois, Pennsylvania and Georgia are seeing foreclosure filings that are nearing levels not seen since before the housing bust.
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Source(s):
- Surprising foreclosure hot spots, Les Christie, August 15, 2013, CNNMoney, http://money.cnn.com/2013/08/15/real_estate/foreclosure-states/?iid=EL, Retrieved November 15, 2013.
