ForeclosureS.com says property foreclosures are accelerating in the Midwest, Southeast and New England for different reasons.
The company, which tracks foreclosures in 946 counties, says foreclosure rates in the Midwest remain above the national average because of the region’s dependence on manufacturing. ForeclosureS.com reports that more than half of the 27,000-plus properties in foreclosure in Illinois are in Chicago’s Cook County, where foreclosures jumped 57 percent in April, followed by another 4 percent increase in May. In Michigan, ForeclosureS.com cites auto plant closures and rising interest rates as a one-two punch contributing to more than 10,000 foreclosures this year.
In New England, rising energy costs, a flat housing market and interest rate hikes are factors that helped drive 3,074 homes in Massachusetts into foreclosure in the last 60 days, ForeclosureS.com reports. Home prices in Massachusetts are off about 4 percent from their 2005 peak, the company said.
The drop in property values “makes it harder for folks being squeezed by rising mortgage payments to sell their way out of foreclosure in an orderly way,” said ForeclosureS.com president Alexis McGee.
ForeclosureS.com blames falling property values and rising interest rates for the upswing in foreclosure activity in Georgia and Florida, a situation “exacerbated by the widespread use … of exotic mortgage products” and high negative amortization.
“People bought homes they really couldn’t afford, and now they’re losing them as these loans reset to market rates and they can’t find affordable refinancing options,” McGee said.
In the last six months, the inventory of unsold homes in Atlanta has grown by 28 percent, to 43,862, foreclosures in Georgia nearly doubled in May compared to 2005, the company said.