Tweet
The foreclosure crisis is far from over, and new statistics show that in many cities it's bound to get worse before it gets better. In cities like Las Vegas, Nev.--where 10% of all home loans are 90 or more days delinquent--a new wave of foreclosures is likely to occur in coming months.
Las Vegas ranks at the top of our list of Riskiest Cities for Homeowners, but it's not alone in its troubles. In hard-hit housing markets like Orlando, Fla., Riverside, Calif., and Memphis, Tenn., thousands of homeowners are risking foreclosure. Overall, 7% of all loans are at least 90 days delinquent in the 10 riskiest cities in America--considerably more than the 4.4% average delinquency rate across the country's 100 biggest metros.
To find the 10 riskiest cities for homeowners, we relied on Lender Processing Services (LPS), a Jacksonville, Fla.-based mortgage-industry service provider. They provided us with the percentage of borrowers who were three months or more late on their mortgage payments, as of May 31, in the 100 largest Metropolitan Statistical Areas in the U.S.
In all but two of the 10 riskiest cities for homeowners--Orlando and Miami, Fla.--the percentage of homes in foreclosure is lower than that of homes with severely overdue loans. In part, that's because efforts by loan servicers and the federal government to modify loans have stemmed foreclosures for some homeowners. But the delinquency rate reveals just how many borrowers are in crisis, and signals more trouble to come.
"Just think of it as a cascading waterfall," says Kyle Lundstedt, a senior managing director at LPS. "Just because there's not as much water in the pool at the bottom doesn't mean there's not a lot of water in the buckets at the top."
Some at-risk homeowners will receive help from the government's Making Home Affordable program, or from lenders themselves, who will restructure the terms of their loans. A smaller percentage of those homes with mortgage modifications will avoid foreclosure altogether. But, according to LPS, more than half of the delinquent loans that are restructured end up in foreclosure a year later, meaning that many foreclosures are only getting pushed further into the future. Delinquency rates can offer another perspective on the shape of the foreclosure crisis.
Foreclosure capitals see trouble ahead
Many of the cities where the foreclosure risk is highest have familiar stories. In "sand state" cities--metros in Florida, California and Nevada--rising prices during the housing boom meant that when the bubble burst, homeowners were underwater, with little hope that home prices would ever return to their peak. In Las Vegas, Orlando and Miami, a combined 68,670 homeowners are behind on their loans by three months or more.
In California a housing-fueled recession has caused a state budget crisis, which is reflected in our list. Six out of 10 of our riskiest cities are in the Golden State. But it's not just big cities where foreclosures are in danger of going up. Mid-sized metros like Riverside, Stockton, Modesto, Bakersfield and Vallejo saw dramatic run-ups in prices before the housing market peaked in 2006. Now those cities have severe delinquency rates between 9.7% and 8.6%.
As housing prices shot up in big cities like Los Angeles and San Francisco, a rising number of homeowners sought cheaper homes in cities as far as an hour or two outside the city. That put upward pricing pressure on these "exurbs," but when the housing market collapsed, the cities couldn't sustain that demand.
10. Fresno, Calif.
Metropolitan Statistical Area: Fresno, Calif.
Number of loans 90 or more days delinquent: 7,908
Percent of loans 90 or more days delinquent: 7.02%
Number of homes in foreclosure: 3,287
Percent of homes in foreclosure: 2.92%
9. Miami, Fla.
Metropolitan Statistical Area: Miami-Fort Lauderdale-Miami Beach, FL
Number of loans 90 or more days delinquent: 57,780
Percent of loans 90 or more days delinquent: 7.05%
Number of homes in foreclosure: 125,225
Percent of homes in foreclosure: 15.28%
8. Memphis, Tenn.
Metropolitan Statistical Area: Memphis, TN-MS-AR
Number of loans 90 or more days delinquent: 11,450
Percent of loans 90 or more days delinquent: 7.11%
Number of homes in foreclosure: 3,138
Percent of homes in foreclosure: 1.95%
7. Orlando, Fla.
Metropolitan Statistical Area: Orlando-Kissimmee, FL
Number of loans 90 or more days delinquent: 23,235
Percent of loans 90 or more days delinquent: 7.18%
Number of homes in foreclosure: 36,349
Percent of homes in foreclosure: 11.24%
6. Vallejo, Calif.
Metropolitan Statistical Area: Vallejo-Fairfield, CA
Number of loans 90 or more days delinquent: 5,007
Percent of loans 90 or more days delinquent: 7.60%
Number of homes in foreclosure: 2,430
Percent of homes in foreclosure: 3.69%
5. Bakersfield, Calif.
Metropolitan Statistical Area: Bakersfield, CA
Number of loans 90 or more days delinquent: 9,011
Percent of loans 90 or more days delinquent: 8.55%
Number of homes in foreclosure: 3,987
Percent of homes in foreclosure: 3.78%
4. Modesto, Calif.
Metropolitan Statistical Area: Modesto, CA
Number of loans 90 or more days delinquent: 6,529
Percent of loans 90 or more days delinquent: 8.83%
Number of homes in foreclosure: 3,224
Percent of homes in foreclosure: 4.36%
3. Stockton, Calif.
Metropolitan Statistical Area: Stockton, CA
Number of loans 90 or more days delinquent: 8,853
Percent of loans 90 or more days delinquent: 9.40%
Number of homes in foreclosure: 4,459
Percent of homes in foreclosure: 4.73%
2. Riverside, Calif.
Metropolitan Statistical Area: Riverside-San Bernardino-Ontario, CA
Number of loans 90 or more days delinquent: 62,158
Percent of loans 90 or more days delinquent: 9.71%
Number of homes in foreclosure: 30,816
Percent of homes in foreclosure: 4.81%
1. Las Vegas, Nev.
Metropolitan Statistical Area: Las Vegas-Paradise, NV
Number of loans 90 or more days delinquent: 33,985
Percent of loans 90 or more days delinquent: 9.86%
Number of homes in foreclosure: 29,991
Percent of homes in foreclosure: 8.70%
Las Vegas ranks at the top of our list of Riskiest Cities for Homeowners, but it's not alone in its troubles. In hard-hit housing markets like Orlando, Fla., Riverside, Calif., and Memphis, Tenn., thousands of homeowners are risking foreclosure. Overall, 7% of all loans are at least 90 days delinquent in the 10 riskiest cities in America--considerably more than the 4.4% average delinquency rate across the country's 100 biggest metros.
To find the 10 riskiest cities for homeowners, we relied on Lender Processing Services (LPS), a Jacksonville, Fla.-based mortgage-industry service provider. They provided us with the percentage of borrowers who were three months or more late on their mortgage payments, as of May 31, in the 100 largest Metropolitan Statistical Areas in the U.S.
In all but two of the 10 riskiest cities for homeowners--Orlando and Miami, Fla.--the percentage of homes in foreclosure is lower than that of homes with severely overdue loans. In part, that's because efforts by loan servicers and the federal government to modify loans have stemmed foreclosures for some homeowners. But the delinquency rate reveals just how many borrowers are in crisis, and signals more trouble to come.
"Just think of it as a cascading waterfall," says Kyle Lundstedt, a senior managing director at LPS. "Just because there's not as much water in the pool at the bottom doesn't mean there's not a lot of water in the buckets at the top."
Some at-risk homeowners will receive help from the government's Making Home Affordable program, or from lenders themselves, who will restructure the terms of their loans. A smaller percentage of those homes with mortgage modifications will avoid foreclosure altogether. But, according to LPS, more than half of the delinquent loans that are restructured end up in foreclosure a year later, meaning that many foreclosures are only getting pushed further into the future. Delinquency rates can offer another perspective on the shape of the foreclosure crisis.
Foreclosure capitals see trouble ahead
Many of the cities where the foreclosure risk is highest have familiar stories. In "sand state" cities--metros in Florida, California and Nevada--rising prices during the housing boom meant that when the bubble burst, homeowners were underwater, with little hope that home prices would ever return to their peak. In Las Vegas, Orlando and Miami, a combined 68,670 homeowners are behind on their loans by three months or more.
In California a housing-fueled recession has caused a state budget crisis, which is reflected in our list. Six out of 10 of our riskiest cities are in the Golden State. But it's not just big cities where foreclosures are in danger of going up. Mid-sized metros like Riverside, Stockton, Modesto, Bakersfield and Vallejo saw dramatic run-ups in prices before the housing market peaked in 2006. Now those cities have severe delinquency rates between 9.7% and 8.6%.
As housing prices shot up in big cities like Los Angeles and San Francisco, a rising number of homeowners sought cheaper homes in cities as far as an hour or two outside the city. That put upward pricing pressure on these "exurbs," but when the housing market collapsed, the cities couldn't sustain that demand.
10. Fresno, Calif.
Metropolitan Statistical Area: Fresno, Calif.
Number of loans 90 or more days delinquent: 7,908
Percent of loans 90 or more days delinquent: 7.02%
Number of homes in foreclosure: 3,287
Percent of homes in foreclosure: 2.92%
9. Miami, Fla.
Metropolitan Statistical Area: Miami-Fort Lauderdale-Miami Beach, FL
Number of loans 90 or more days delinquent: 57,780
Percent of loans 90 or more days delinquent: 7.05%
Number of homes in foreclosure: 125,225
Percent of homes in foreclosure: 15.28%
8. Memphis, Tenn.
Metropolitan Statistical Area: Memphis, TN-MS-AR
Number of loans 90 or more days delinquent: 11,450
Percent of loans 90 or more days delinquent: 7.11%
Number of homes in foreclosure: 3,138
Percent of homes in foreclosure: 1.95%
7. Orlando, Fla.
Metropolitan Statistical Area: Orlando-Kissimmee, FL
Number of loans 90 or more days delinquent: 23,235
Percent of loans 90 or more days delinquent: 7.18%
Number of homes in foreclosure: 36,349
Percent of homes in foreclosure: 11.24%
6. Vallejo, Calif.
Metropolitan Statistical Area: Vallejo-Fairfield, CA
Number of loans 90 or more days delinquent: 5,007
Percent of loans 90 or more days delinquent: 7.60%
Number of homes in foreclosure: 2,430
Percent of homes in foreclosure: 3.69%
5. Bakersfield, Calif.
Metropolitan Statistical Area: Bakersfield, CA
Number of loans 90 or more days delinquent: 9,011
Percent of loans 90 or more days delinquent: 8.55%
Number of homes in foreclosure: 3,987
Percent of homes in foreclosure: 3.78%
4. Modesto, Calif.
Metropolitan Statistical Area: Modesto, CA
Number of loans 90 or more days delinquent: 6,529
Percent of loans 90 or more days delinquent: 8.83%
Number of homes in foreclosure: 3,224
Percent of homes in foreclosure: 4.36%
3. Stockton, Calif.
Metropolitan Statistical Area: Stockton, CA
Number of loans 90 or more days delinquent: 8,853
Percent of loans 90 or more days delinquent: 9.40%
Number of homes in foreclosure: 4,459
Percent of homes in foreclosure: 4.73%
2. Riverside, Calif.
Metropolitan Statistical Area: Riverside-San Bernardino-Ontario, CA
Number of loans 90 or more days delinquent: 62,158
Percent of loans 90 or more days delinquent: 9.71%
Number of homes in foreclosure: 30,816
Percent of homes in foreclosure: 4.81%
1. Las Vegas, Nev.
Metropolitan Statistical Area: Las Vegas-Paradise, NV
Number of loans 90 or more days delinquent: 33,985
Percent of loans 90 or more days delinquent: 9.86%
Number of homes in foreclosure: 29,991
Percent of homes in foreclosure: 8.70%
Comment