The Intersection

As checks go out, foreclosure pockets continue to swell and burst

The tax rebate checks are now being distributed. As Martin Crutsinger of the Associated Press reports, direct deposits to bank accounts are being processed and the government expects to being mailing checks on May 9, a week earlier than expected. Where is our economic climate as the rebates begin to go out?

Marc Levy of the Associated Press reports on April 16 that the foreclosure rate in Pennsylvania remains modest, with the state below the national average and 26th overall. The Pittsburgh area, the AP reported on April 25, is seeing a 6.9 percent increase in foreclosures.

Patches of housing markets across the country are seeing trouble, however. The Berkshires region in Massachusetts, a region Ellen G. Lahr of the Berkshire Eagle reports on April 27, is seeing the rate of properties taken in foreclosure rise by 52 percent, with a 25 percent increase in foreclosure petitions and a 70 percent increase in auction notices since 2007. In a four-county region of eastern Wisconsin, the Post-Crescent of Appleton, Wisc. reports the foreclosure filing rate has rose by 25 percent from last year.

The worst of the problem, at this time, is in central California. National Public Radio says Stockton, Riverside, Bakersfield and Sacremento have the highest foreclosure rates in the county. Foreclosure proceedings across California rose 140 percent for the year across California, Elliot Spagat of Forbes.com reports, with 66 percent of homes resold in San Joaquin County in central California over the past year in foreclosure, compared to 5.1 percent in San Francisco County.

While it remains to be seen if the problem will geographically ripple and carry to other communities, the high foreclosure rates will seed their own variety of related problems, including the deterioration of the tax base. Chris Serres and Jim Buchta, of the Star-Tribune, report that Minnesota expects to lose $2.3 billion from foreclosures removing properties from the tax rolls.