For a year this number was improving but in the second quarter of 2011, the percentage of mortgage delinquencies rose. This will likely lead to an increase in foreclosures and put more downward pressure on home prices.
As home prices fall, more homeowners go underwater on their mortgage, owing more to the bank than their home is worth.
So far, the percentage of homes in the foreclosure process is dropping.
High unemployment makes it hard to impossible for many people to keep up with their mortgage payments.
So why are foreclosures concentrated on certain states? Well, these are the five states where the housing boom was craziest. Why was the housing boom so explosive there? Because of restrictions on land-use severely restricted available land for development. With a reduction in supply, price must go up provided demand stays at least even.
In cities like Dallas and Houston where there are few land-use restrictions, the housing boom was moderate and so was the crash.
Government intervention in the form of land-use regulation makes housing more expensive, which leads people to take riskier loans and other chances to get such housing, and makes them more vulnerable to fluctuations in the economy and therefore more likely to default on their mortgage loans.
Foreclosure starts, which make up 0.96 percent of all loans, were down 0.12 percent from the previous quarter. Loans in the foreclosure process fell to 4.43 percent, down slightly quarter-to-quarter and year-over-year.
“The good news is the continued decline in long-term delinquencies, those mortgages that are three payments or more past due,” said Brinkmann. “The bad news is that drop is offset by an increase in newly delinquent loans one payment past due.”
…The greatest percentage of foreclosures continued to be highly concentrated in five states: Florida (14.4 percent); New Jersey (8.0 percent); Illinois (7.0 percent); New York (5.5 percent); and California (3.6 percent).
