Rising foreclosure rate blamed on job losses

Filings rise 29% in Wisconsin over first quarter of 2008

Source:Business Section Milwaukee Journal Sentinel 4/4/09
Link: http://www.jsonline.com/business/42459102.html
By: Paul Gores of the Journal Sentinel
Posted: Apr. 3, 2009

With job losses mounting in Wisconsin during the first quarter, foreclosure filings in the state shot up 29%.  There were 7,497 new foreclosure actions started in the state from January through March, up from 5,817 during the same period a year earlier, according to the University of Wisconsin Extension. An increase in foreclosures in Milwaukee County for the quarter mirrored the statewide jump. Analysts thought foreclosures might be leveling off in the state’s most populous county at the end of last year, but a big increase in filings in March alone – 685 compared with 489 in February – showed the tenacious effects of the recession.

“To see Milwaukee (County) jump up to 29%, that was worrisome,” said Andy Lewis, community development specialist at the UW Extension’s Center for Community and Economic Development.  As long as joblessness keeps growing and people lose their ability to keep up with monthly payments on their homes, it will be difficult to stem the rising foreclosure levels, analysts said. The foreclosure problem, which started with less-than-creditworthy borrowers who were unable to manage subprime mortgages when interest rates adjusted upward, has spread to homeowners with conventional mortgages.  “Had we not gone into a recession where you have 8% unemployment, this thing may have capped out. But the economy itself is making it worse,” said Russell Kashian, a UW-Whitewater economics professor who is leading the state’s research on foreclosures.

The month of March was particularly harsh in some counties, statistics collected by Madison-based ForeclosureAlarm.com show. With 2,679 new foreclosure filings, March recorded the third-highest statewide total ever, said Philip Crawford, founder of ForeclosureAlarm.  Lewis noted that Rock County, which has been losing jobs tied to the auto industry, saw a nearly 64% increase in foreclosure filings in the first quarter, 342 compared with 209.  “If you look at Rock County, that’s the front edge of the recession,” Kashian said.