Indiana Leads the Nation in Mortgage Foreclosures

For those that didn't see this article in the Indy Star unfortunately Indiana once again led the nation in foreclosures, hitting an all time high. Here are the highlights from the article.

More than 7,000 Indiana homeowners faced foreclosure in the final three months of last year, a record high for a state that has led the nation in foreclosure proceedings since July 2004. Foreclosures in Indiana are driven by factory layoffs, personal bankruptcies, stagnant home prices and aggressive lending.

During the last quarter of 2005, lenders started foreclosure proceedings on 7,575 Indiana mortgage loans, or 0.98 percent of mortgage loans in service statewide, the Mortgage Bankers Association reported.

That rate was more than double the nation's rate and was Indiana's highest since association records were begun in 1979. "You haven't had a lot of home price appreciation, and you've lost a lot of manufacturing jobs," said Jay Brinkman, vice president for research and economics at the Washington trade group.

Indianapolis lawyers and bankers concur. Home loans are easier to get now than 20 years ago. And builders are willing to put up houses with almost no money down.

But when jobs fade, marriages fail or medical bills pile up on credit cards, homeowners can fall far behind on mortgage payments and wind up bankrupt, said Indianapolis bankruptcy lawyer Mark Zuckerberg.

"In a lot of cases, people were put into the wrong loans for them," Epstein said. "They got loans where the interest rate is adjustable, and that got them into trouble when interest rates went up. You compound the problem when it's a brand-new house and the taxes haven't been assessed. The taxes kick in and the rates are rising and now they're in trouble. They can't get enough equity out of their house to pay all the bills."

Continue reading the article here.

This may seem like simple advice, but make sure you can afford the monthly mortgage payment before completing your real estate purchase. Just because a mortgage company qualifies you for a loan of a certain amount doesn't mean you can afford to make that payment every month.