A new Mortgage Bankers Association report shows foreclosures across the country hit an all-time high in the fourth quarter of 2007. Iowa tied with Oklahoma for the 14th highest foreclosure rate at 2.05 percent. Iowa’s foreclosure rate was 1.83 percent in the third quarter.
Dan Vessely with the Iowa Bankers Mortgage Corporation, says the ranking is deceiving because loans stay in foreclosure longer in Iowa than most other states. Vessely says because of Iowa’s "debter friendly" laws, many loans in foreclosure counted in the fourth quarter were also counted in the third quarter. He says a more accurate picture of what is happening in Iowa comes from the new foreclosure numbers.
"If you look at that number, Iowa ranked 26th at the end of the third quarter and now we rank 30th. So, we actually improved a little bit," Vessely said. How much things have improved in Iowa is up for debate. Vessely says Iowa’s move down in the new foreclosure rankings might have more to do with other states doing worse.
"Iowa’s probably fairing a little bit better overall due to the fact that lending in general in Iowa is probably done a little more responsibly than many pockets of the country," Vessely said. "Specifically, community banks in Iowa that did a lot of the lending across the state did not get involved in the exotic types of lending and financing that is the source of a lot of these problems." In addition, Vessely says Iowa, compared to other states, does not have as many homeowners not in foreclosure who are falling behind on their payments. Iowa ranks 38th among the states for "90 day delinquents."
Vessely says, maybe in that regard, Iowa is doing the right things to help people avoid foreclosure. "Time will tell, but there is some hope in that particular number," Vessely said. The report indicates Ohio, Indiana and Michigan had the highest foreclosure rates in the nation.