The foreclosure crisis is getting worse as high unemployment and lackluster job prospects force homeowners in Salt Lake City, Provo and an increasing number of other U.S. metropolitan areas into financial straits.
In cities that were relatively insulated from foreclosures early on in the housing bust, a growing number of homeowners are falling behind on mortgage payments and finding themselves on the receiving end of foreclosure warnings. Others have already seen their homes repossessed by lenders, according to a report by foreclosure-listing service RealtyTrac, which ranks metro areas by the severity of their foreclosure problems.
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Provo-Orem is No. 30 among 206 metro areas, with one in every 25 households receiving a foreclosure-related filing last year, ranging from a notice that a homeowner has fallen behind on payment to one that indicates a property is being auctioned off by a lender. Foreclosures in the Utah County metro area were up 2 percent from 2009-2010, RealtyTrac said.
The Salt Lake metro area was No. 34, with a whopping increase in foreclosure filings of nearly 30 percent from 2009 to 2010. Approximately one in every 27 households in the Salt Lake area received a foreclosure-related filing last year. Ogden-Clearfield was No. 50, with an increase of nearly 7 percent over the one-year period. One in every 38 households received a foreclosure-related filing in Ogden-Clearfield last year.
All told, foreclosure activity jumped in 149 of the country’s 206 largest metropolitan areas last year, RealtyTrac said. The firm tracks notices for defaults, scheduled home auctions and home repossessions — warnings that can lead up to a home eventually being lost to foreclosure.
Job loss, rather than time-bomb mortgages resetting to higher payments, has become the main driver behind rising foreclosures. "We’ve actually had a sea change in what’s causing foreclosures, from the overheated home prices and bad loans to a second wave of foreclosures actually caused by unemployment and economic displacement," says Rick Sharga, a senior vice president at RealtyTrac.
The Houston-Sugar Land-Baytown metropolitan area in Texas saw its foreclosure rate jump 26 percent from 2009, the largest increase among the top 20 biggest metro areas, the firm said. Seattle-Tacoma-Bellevue, in Washington, ranked second with an increase of nearly 23 percent, while the Atlanta-Sandy Springs-Marietta metro area in Georgia was third with a 21 percent bump.
"As the economy and unemployment improve, you’ll see those markets recover fairly quickly, whereas you’re still going to have a bit of a hangover in places like California, Florida and Nevada," Sharga said. Those states, and Arizona, remain the country’s foreclosure hotbeds, accounting for 19 of the top 20 metropolitan areas with the highest foreclosure rates in 2010.
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