(Click on map above for foreclosure rates of states. May not work on mobile)
Thanks to tough times in the past several years Delaware has the nation’s highest foreclosure rate, according to RealtyTrac.a company that crunches numbers on troubled properties in the 50 states.
The company has crunched numbers on troubled properties in the 50 states over a long period that included the recession of 2008 and 2009.
Not far behind was New Jersey, which has long suffered from a high foreclosure rate.
The Delaware rate of one home in 674 is more than double the national foreclosure rate.
The Delaware rate runs ahead of states, including Nevada. The Silver State saw a deep decline in its economy in 2008 and 2009, due to overbuilding and a slump in the casino business.
At one point nearly one in every 75 homes in Nevada were in foreclosure.
Despite losing both its auto plants during the economic downturn Delaware managed to have a foreclosure rate below the national average during the downtown. However, the recent figures indicate that the pain took much longer to catch up to the sate.
“The No. 1 ranking for Delaware does not come as a surprise because we have been seeing foreclosure activity in the state trend higher this year even as foreclosure activity nationwide has been decreasing,” said Daren Blomquist, senior vice president of communications for Realty Trac parent company ATTOM Data Solutions.
Blomquist continued. “A deeper dive into this data indicates this is likely not a new foreclosure problem, but a delayed working through of the foreclosure problem still lingering from the housing crisis and Great Recession. We show that 61 percent of all active loans in foreclosure in Delaware were originated between 2004 and 2008 (compared to 55 percent nationwide). That indicates a lot of the distress in Delaware right now is still tied to those bad bubble-era loans.”
The “bubble loans” came with borrowers sometimes able to get loans at more than their market value and then pocket the the remaining funds. When it became impossible to make payments, borrowers simply walked away.
Blomquist noted that “Delaware in the third quarter took an average of 542 days to complete the foreclosure process — up from an average of 331 days in quarter two 2015. This indicates the foreclosures being pushed through now are legacy distress that has been in the foreclosure pipeline for a longer period of time.”
Delaware has seen a slower recovery of its housing market. This reflected by a generous supply of higher-priced homes and home prices not rebounding as fast as in other states. Lower priced homes have been in shorter supply in the state.