According to data compiled by RealtyTrac and reported in this Tulsa World article, foreclosure activity in Oklahoma reached an all-time high in the first quarter of 2010. For the three-month period of January to March, foreclosures were filed on 5,686 Oklahoma homes. This represents a 15 percent increase compared to the fourth quarter of 2009 and a startling 95 percent increase over the same quarter a year ago (April numbers have since shown a very slight drop from March).

Even with the recent steep increase in the foreclosure rate, Oklahoma continues to remain less affected by the fallout from the housing bust than many states. For the first quarter of 2010, Oklahoma saw one foreclosure filing for every  288 housing units, compared to the national average of one for every 138 housing units, ranking 29th in the nation (in March) in foreclosure rates.  Nevada, Arizona, Florida, California and Utah continue to experience the highest foreclosure rates – in Nevada, one in every 33 housing units received a foreclosure filing in the first quarter of 2010.  While Oklahoma’s  foreclosure rates are about half the national average for the state as a whole, Tulsa’s foreclosure rate in the first quarter of 2010 of one in 154 housing units neared the national average of one in 138.

The latest surge in foreclosures is seen by industry experts as more directly tied to the economic downturn than were earlier waves, which were seen to have resulted primarily from plunging real estate prices and rising interest rates for borrowers with adjustable rate mortgages. According to the New York Times:

The third wave represents standard mortgages, known as prime, written to people who had decent credit ratings, but who have lost their jobs in the economic downturn and are facing the loss of homes they had considered safe.

Those sliding into foreclosure today are more likely to be modest borrowers whose loans fit their income than the consumers of exotically lenient mortgages that formerly typified the crisis. Economy.com said in 2009 that it expected that 60 percent of the mortgage defaults that year would be set off primarily by unemployment, up from 29 percent in 2008.

It’s not clear to what extent government efforts to forestall foreclosures through loan modification programs are easing the magnitude of the foreclosure tide. According to the Times, the Treasury reported that in March,  nearly 228,000 troubled loans qualified under President Obama’s plan for long-term payment reductions. This compares to 367,056 foreclosure filings for the month.

One possible sign of good news is that while foreclosure filings continued to rise in early 2010, data compiled by TransUnion shows that the rate of mortgage delinquencies – borrowers 60 days or more past due – fell in the same period compared to the prior quarter and one year ago. This statistic is seen as a precursor to foreclosure, and suggests that with the recovering economy, the pipeline leading to foreclosure may finally be narrowing.

Still, until the number of foreclosures actually takes a sharp turn in the downward direction, the effects of the Great Recession will continue to be felt close to home for our families, neighborhoods and communities.

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The May 18th video cast will be from 1:00 to 3:00 pm at the Federal Reserve Bank’s Oklahoma City office, located at 226 Dean A. McGee Avenue.  The event is free and open to the public; however, attendees are asked to RSVPat their earliest convenience to Annette Phillips at annette.f.phillips@kc.frb.org or (405) 270-8486. Refreshments will be served.

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March’s edition of Numbers You Need provides further evidence of the deteriorating economic situation in Oklahoma. The state’s seasonally-adjusted unemployment rate hit 5.0 percent in January, up from 4.6 percent in December. Building permits issued in the final quarter of 2008 were down 44 percent compared to 2007, with the three month total representing the lowest level of activity since at least 1995. Meanwhile, state revenue collections in February fell steeply for the second straight month, coming in 21.6 percent below last year’s amount and 30.4 percent below the certified estimate.

Some other key findings in March’s edition:

• The number of Oklahomans receiving Food Stamps rose for the ninth consecutive month in December;
• An average of 4,881 initial claims for Unemployment Insurance benefits were filed in January, an increase of 149 percent compared to September 2008; and
• The Consumer Price Index rose by 0.4 percent in January, reversing three straight months of declining prices.

Click here to access the full two-page fact sheet.

As early as 2000, a handful of public officials led by the county treasurer, Jim Rokakis, went to the Federal Reserve Bank of Cleveland and pleaded with it to take some action. In 2002, the city passed an ordinance meant to discourage predatory lending by, among other things, requiring prospective borrowers to get premortgage counseling. In response, the banking industry threatened to stop making loans in the city and then lobbied state legislators to prohibit cities in Ohio from imposing local anti-predatory lending laws.

In Oklahoma, too, we were told that passing meaningful anti-predatory lending reforms would cut off credit to those most in need. Ultimately, the lobbyists for the major sub-prime lenders got an industry bill through the Legislature in 2003 and put an end to consumers’ efforts to protect homeowners from the worst abuses.

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