Metro Regions See a Rise in Foreclosures

The title of this article can be somewhat deceiving. It isn't just the metro regions throughout the country that are seeing this rise in foreclosures, but in 75 percent of the metro regions through the United States, foreclosure filings increased during the first half of 2010. While toxic mortgages were the initial cause of the incredible influx of foreclosures during the past two years, it is now unemployment that is driving the new wave or foreclosures.

What led to so many foreclosures at first was a series of poor decisions, a lack of oversight, and, essentially, greed beyond any acceptable proportion within the entire housing industry, from real estate agents to mortgage brokers and all of the other cogs in the wheel in between. It was a reality check that sparked a major downturn in the industry.

Unemployment driving the industry down further

As so many factors contributed to the Great Recession, housing was just one part of it. Now, if we listen to the politicians on their weekly radio addresses or going on daytime television to tout their agendas and to promote the successes that they've had so far, it would appear as though the entire economy has turned a corner and is actually on the mend.

In fact, it has been stated on more than one occasion that productivity in this country has risen. Yet people continue to be without work as employers are reluctant to hire new workers to fill vacancies left behind when the recession hit. This has left many people, who had initially had savings accounts and such to cover their expenses for six months, a year, or even more -with the help of unemployment insurance that has been extended time and time again- to manage to keep up with their mortgages.

But at some point, these homeowners found themselves in a situation that wasn't improving and they could no longer keep up with their mortgage payments. Many of these homeowners turned to modification attempts, even those promoted and touted by Washington, but to no avail and they had no other option but to face down foreclosure.

The ripples in the water

While some metro areas, such as Las Vegas, seemed to transition seamlessly from a foreclosure crisis driven by toxic mortgages to one driven by unemployment, the ripple effect that the situation has left can be felt throughout those regions and into the suburbs as well.

The housing industry, as a national construct, feeds off regions closest to its own. While toxic mortgages were a finite problem, meaning that at some point, all of the homeowners that were in troubled mortgages, who couldn't afford them in the first place, would eventually be shaken from the tree, the same cannot be said for those that are unemployed.

Until unemployment diminishes with some meaning and even vigor (remember, the national unemployment rate, which currently stands at 9.5%, does not measure those individuals who are no longer collecting unemployment insurance or those that have given up their search for gainful employment), then the housing industry will continue to see foreclosures in most regions throughout the country, especially the metro regions. Of course, if the unemployment rate remains unchanged for the foreseeable future -meaning that it doesn't deteriorate even further- then at some point the foreclosure rates will begin to level off and then diminish themselves.

Until that happens, however, there will continue to be major hardships that lie ahead for just about everyone within the housing industry. These foreclosures will most likely drive home prices even further down in these already depressed regions.

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