Group Study Of Rising Foreclosures

Posted in Foreclosure Crisis, October 8th, 2007 |

Kansas is reeling under foreclosures causing state officials and even the Attorney General Morrison to sit up. There has been 29% rise in August as compared to the same month in 2006. It is the same across the entire country with local variations.

Morrison initiated the founding of a task force consisting of 15 members to study the reasons behind this catastrophe, which has affected those on and below the middle-income divide. They are being asked to address the issue and recommend remedies. Tom Thull, the Banking Commissioner of the state, is heading the panel. Previously he was a Democratic representative from North Newton. The main focus of attention is mortgage fraud and predatory lending. It is not all frothy talk and bubble – they want to be active and positive. Indications are there that in the next few months the crisis is going to worsen.

Foreclosures are concentrated mostly in the urban centers – Kansas City, Wichita and Topeka. But the effect is not contained within this zone – it spills over to affect the economy of the state. It is difficult to precisely calculate the loss in numbers and figures. Kansas seems to be less affected mainly because here there has been less real estate activity in the recent past. Relatively the economic scene is not quite so grim as other places.

However in comparison to what is happening elsewhere Kansas pales into insignificance. In some places the numbers have doubled according to online trackers. Michigan, Indiana, Ohio and Nevada are the worst sufferers.

In August three counties were responsible for 76% of the foreclosures in the state. Wyandotte led the race with 143 and a ratio of 1:465. This is six times more than the national average and 1.1 times the average of the country. On the other extreme side are Ellis and Finney Counties with no foreclosures in August. Reno had three while Saline and Neosho Counties had one foreclosure each.

The data pointed to an urban concentration of foreclosures everywhere. But statistics is not always balanced because trackers tend to skip the smaller counties.

The key factor is that there are not enough affordable houses. To own a house one has to run up an impossible debt. The task force must go to this root of the problem apart from advising the law to step in with more teeth.