Rising unemployment is exacerbating the already critical foreclosure crisis, because sadly, while you can return your Hyundai if you lose your income — you’re kinda stuck with that 4 bedroom ranch with the in-ground pool.
Foreclosures don’t just affect the families who are losing their homes — it affects the value of the housing in the area. When a foreclosed house goes to auction — it drives down the value of other, similar houses nearby. Sinking housing prices make it difficult or impossible for homeowners to refinance or even move, and a combination of lots of foreclosures and little available credit for would-be buyers is disastrous — and increasingly common.
Now unemployment is being blamed for a spike in foreclosures in states like Illinois that never had the kind of extreme speculative housing bubble that you saw in California and Florida.
Here are the Top 10 Foreclosures States from Forbes Magazine.