New areas hit with foreclosure wave

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Bill Radke: A new report on national foreclosures shows we’ve set a new record for the last four months straight, more than 300-thousand households received foreclosure notices. And as Marketplace’s Jeff Tyler reports, the second wave of mortgage mess is just starting to crash.

Jeff Tyler: Foreclosures continue to swamp states like California, Nevada and Florida. But now areas that didn’t have high rates of subprime mortgages are also starting to feel the pain.

Rick Sharga: Places like Boise, Idaho and Fayetteville, Ark. — places that have not been foreclosure hot spots, but are now entering the fray.

That’s Rick Sharga with Realty Trac, an online database of foreclosed properties. The company’s new report shows that instead of bad loans, this latest wave of foreclosures is due to the bad economy and job losses.

Sharga: That wave of foreclosure activity will probably take us through the middle of next year. Assuming that unemployment peaks sometime late this year or early 2010.

Sharga predicts a third wave of foreclosures will strike in the middle of next year. That’s when a new batch of risky mortgages re-sets to higher rates, potentially leaving many homeowners underwater.

I’m Jeff Tyler for Marketplace.