Portland foreclosures soared in 2009 as jobs in manufacturing and construction fell. The sharp fall in property values was also another major cause of foreclosures as houses bought with large loans could no longer be paid by the owners.
One out of every 44 households in Portland fell into default or foreclosure in 2009. This meant that 20,017 homeowners received default or foreclosure notices, marking an increase of more than 87 percent from 2008 and a jump of more than 287 percent from 2007.
In 2008, Portland was 65th in a ranking of the 100 most foreclosure-ridden metro areas, with 1.2 percent of its households in default or in foreclosure. In 2009, the Portland area ranked 61st.
The pace of Oregon foreclosures also increased to 2.12 percent of all households in 2009, marking an 89.6-percent rise from 2008 and a 303.3-percent jump from 2007. With more than 34,000 of its houses falling into default or foreclosure lists in 2009, Oregon ranked 11th among states based on its foreclosure pace.
Based on public records and media reports, Portland foreclosures rose largely because of record job losses in manufacturing and construction. As a big portion of Oregon economy depends on the lumber industry and the housing sector, a large number of workers lost their jobs when the housing crisis worsened.
Additionally, according to broker Don Gladson, home prices shot up to abnormally high levels during the boom years from 2004 to 2006. This caused abnormally sharp drops in property prices when the housing sector collapsed, leaving homeowners with mortgages that have loan balances far above their home values. Gladson said that around half of Portland homeowners with home loans are underwater.
However, in the fourth quarter of 2009, foreclosure filings in the Portland metro area slowed by 12 percent compared to the previous quarter. Deschutes County posted a 14-percent drop in filings while Clark County posted a 55-percent drop in filings from the second quarter.
According to Guy Cecala, who publishes the trade report Inside Mortgage Finance, the slowdown was only temporary as lenders complied with pressures from various sectors to cut down foreclosure numbers. Also, lenders regulated their foreclosure filings so that the flow of foreclosure homes into the market would not push down home prices further.
According to Keith Dubanevich, newly-installed chief of staff of State Attorney General John Kroger, his first assignment from his boss Kroger is to resolve the problem of Portland foreclosures.
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