Firm: Foreclosures Rising in Some Cities
Even as the economy improves overall, some markets are likely to continue seeing rising defaults, according to Foreclosures.com, a firm that manages online sales of distressed properties and home loans.
Among the markets that are likely to see persistent home loan defaults are New Jersey, California and Chicago.
California alone accounts for about one fifth of the nation's mortgage debt.
Despite recent data indicating that foreclosure activity has declined in California, rising interest rates may reverse that trend in the near future.
Alexis McGee, president of the company, said the recent six-week surge in mortgage rates marks the end of the downward cycle that brought mortgage rates to a 45-year low. Rising rates will put downward pressure on home prices, she said.
"The affordability of housing is the key driver of house prices," Ms. McGee said.
But she said that foreclosure is inherently a local issue, so it is difficult to assess the situation from a national perspective.
While rising rates are likely to affect people, so many people have refinanced into low, fixed-rate loans that many will be insulated from the impact of rising rates, Foreclosures.com noted. That means rising rates today may have less impact on loan performance than rising rates in the late 1970s, for instance.
Foreclosures.com provides online services for professional real estate investors and others interested in helping distressed owners or investing in distressed property. The company provides foreclosure listings and educational information.
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