With a 37-percent rise in single-family home foreclosures in July, Rhode Island had the highest percentage increase in the nation, according to a report yesterday from Goleta, Calif.-based Bargain Network Inc.
At the end of last month, 119 Rhode Island homes were in some stage of foreclosure, one of every 3,697 homes in the state.
On a per-home basis, the July foreclosure rate was lower than in 34 other states and well below the national average of one foreclosure for every 879 homes, the Bargain Network said.
But Rhode Island still had a higher foreclosure rate than Connecticut, at one for every 9,119 homes statewide, or Massachusetts for the July, with one for every 4,474.
Rhode Island numbers are traditionally tougher to track than those of states where judicial action is required, Alan Pasnik, a data analyst with Boston-based real estate publisher The Warren Group, told Providence Business News yesterday in a telephone interview.
Most foreclosure figures for Rhode Island come directly from a count of newspaper legal ads for home auctions, Pasnik said. “Before that, everything’s private,” he explained. “It’s private communication between the lender and the borrower. The stipulations on how to foreclose are imbedded in the mortgage deed and other than advertising the auction there doesn’t seem to be any place to be able to see if we have distressed property.”
Pasnik said The Warren Group couldn’t release data on Rhode Island foreclosures. But, he added, the state is probably in the same situation as other New England states, including Connecticut and Massachusetts.
“I can’t imagine that it’s any better in Rhode Island than it is elsewhere,” he said. “You have the same kinds of problems, where housing prices went up fast and we squeezed credit out of the mortgage system, we made loans to people who probably shouldn’t have gotten loans in the first place.”
In the current market, Pasnik continued, with “housing values going down … nobody can refinance. So, therefore, people took out variable-interest loans – mortgages that two years later kick up a couple of points.
“And people who could barely pay under the low rates can’t pay under the higher rates – and can’t refinance – so they get foreclosed on.”
In July, Rhode Island also had a 28.8-percent climb in multi-family home foreclosures, which account for only 2 percent of foreclosures nationwide, according to Bargain Network.
Bargain Network, based in Goleta, Calif., is a provider of real estate data for markets nationwide. To learn more, visit www.bargain.com.
The Warren Group, the Boston-based publisher of Banker & Tradesman and The Commercial Record, is a provider of real estate data for the New England markets. For more information, visit www.TheWarrenGroup.com.
