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35 Counties Push Up Foreclosures by State Rankings

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By : John Cutts    99 or more times read
Thirty-five counties accounted for over 50 percent of the 2.3 million foreclosures in the U.S. in 2008, according to USA Today, which analyzed foreclosure data collected by RealtyTrac. This figure supports the contention that the national economic crisis may have started with defaulting mortgage loans in just a few areas of the country.

These 35 counties, located in places high on foreclosures by state rankings, contributed over 1.5 million foreclosures to the 2.3 million units counted by RealtyTrac. Foreclosure filings include notices of default, auctions and repossessions. RealtyTrac admits the same foreclosed property can be counted twice but its data remains one of the most credible measures of foreclosures by state in the country.

University of Virginia urban and environmental planning professor William Lucy analyzed the link between mortgage lenders and defaulting mortgage loans and found out that foreclosures in just a few areas affected banks, which spread the foreclosure problem because of their national operations. While other places in the country had only a negligible number of foreclosures, they were affected by the mortgage crisis when national banks that focused on mortgage investments got battered by defaults in places high on foreclosures by states lists.

Christopher Mayer, real estate analyst at Columbia Business School, supports the notion that the crisis was spread by banks. The case of banking corporation Wachovia Corp. is illustrative of what happened. Wachovia’s finances got clobbered when its mortgage company’s operations in Florida and California were hit by delinquencies and foreclosures.

Most of the 35 counties are in California, Nevada, Arizona, Florida and Michigan, the states among the top ten in foreclosures by state rankings. Eight counties in the top four states accounted for about 25 percent of the 2.3 million total foreclosure filings in 2008.

In addition, while the 35 counties represent only about 20 percent of total U.S. households, they contributed over half of the total foreclosure filings in 2008. It is surprising to find out that in about one-fifth of the country’s total counties, in places low on foreclosures by state rankings, the number of foreclosures actually decreased in comparison to 2006 filings.

With the contention that the foreclosure crisis is concentrated in places high on foreclosures by state rankings, Brookings Institution analyst Alan Mallach said that President Barack Obama’s $75 billion program could face challenges from the political sector. The program’s critics and opponents could use the data to add to their arguments against the administration’s foreclosure prevention program.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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