States Surprisingly Worst Affected by Foreclosures

As housing markets nationwide continue to recover from the foreclosure crisis, some states show
the reverse trend. These are the states that you least expected to delve into the crisis.


The states like New Jersey, Maryland, and Oregon noted up to triple digit hike in foreclosure
rates. This comes as a surprise because these states had been maintaining a relatively stable
housing market since the popping of the real estate bubble a few years back.


According to data from RealtyTrac, new foreclosures in Maryland rose by an overwhelming
275% since last year. If you consider the total foreclosure activity, taking into account the bank
repossessions, scheduled auctions, and default notices, the state ranks second in the list of
foreclosure-ridden states, second to Florida. In Oregon, the foreclosure rate rose by 137%. New
Jersey noted a 89% increase in the rate from last year.


So, what is the explanation? Foreclosures are never healthy for the housing market. According to
the analyst Daren Blomquist from RealtyTrac, the early interventions from the Government in
these markets a few years back is returning in a negative manner. After all, you have to pay the
Government loans.


He said, “The foreclosures are returning with heightened impact in select niche markets where
the state legislations and court rulings had hitherto kept a lid during the worst part of the housing
crisis.”


The DC Metro area can be an ideal case to consider. This area marks the converging of the
Columbia district with the suburban counties of Maryland and Virginia. Foreclosure applications
in the DC and the Virginia suburbs of Arlington and Fairfax came down significantly from last
year. At the same time, neighboring Maryland noted skyrocketing foreclosure rates in the
counties of Montgomery and Frederick.


“This observation points to the fact that this crisis relates to the way the previous crisis was
averted.” confirms Blomquist. According to him, you can postpone the crisis, but not avert it.
After the deflating of the housing bubble, Virginia did not try to prevent many homeowners to go
through the foreclosure process. This policy had stressful implications in the beginning, but the
hit subsided in these few years as the market balanced itself. By the end of 2008, the state ranked
10th in the list of foreclosure affected states.


At the same time in Maryland, the state tried to prevent foreclosures by helping homeowners
with loans. However, now the banks are finally catching up, pointing to the inevitable.

Kevin Hartmann