St. Louis-area foreclosures hit new record in '10

http://www.stltoday.com/business/local/article_10f05224-d7b2-5c5f-9d58-86de073661c1.html

Foreclosure activity hit an all-time high in 2010, despite a slowly improving economy and a slowdown by banks as they untangled legal issues at the end of the year.

One in every 57 houses in the 17-county St. Louis region, nearly 22,000 in all, received at least one foreclosure filing during the year, according to new figures out this morning from real estate data firm RealtyTrac. The filings are up nearly 12 percent from last year and slightly above the previous high recorded in 2008. Foreclosure activity here has more than doubled since 2006.

These figures come despite billions of federal dollars poured into mortgage modification programs in the past two years, and despite the relatively stable housing market in St. Louis.

Prices here never soared during the boom, and haven't plunged as far as places like Nevada, where one in 11 houses faced foreclosure this year, according to RealtyTrac.

But the mortgage crisis is proving to be nearly as intractable here as in the so-called "housing belt," said Karen Wallensak, director of the Catholic Charities Housing Resource Center, one of several local foreclosure counseling agencies. The trouble now is that many of the people facing foreclosure have been laid off, or at least seen their incomes fall. Until that changes, solutions are hard to come by.

"By far the majority of the people who turn to us for help are living on unemployment benefits, or have taken jobs that pay substantially less than they earned before," she said. "Many of them simply can't afford their mortgage."

It's a significant shift from the early days of the mortgage mess, which has raged on for three years now.

Back then, Wallensak and other counselors say, many of those facing foreclosures had taken out high-risk mortgages and bet that home values would rise. Modifying those mortgages to more affordable levels cost money, but kept people in their homes.

Now the bigger problem is a simple lack of income, Wallensak said, and there's only one way out of that.

"It all hinges on jobs," she said. "Most everything seems to boil down to job creation."