Mortgage foreclosure rates up sharply

Associated Press

ST. PAUL -- The Twin Cities has seen a rapid increase in home foreclosures, especially in Ramsey County, which is on pace to have a 75 percent jump in the total foreclosures compared with last year.

Through June, 286 Ramsey County homes had been foreclosed upon, according to the county sheriff's office. If that pace holds through the end of the year, total foreclosures in 2002 would be 572, about 75 percent ahead of last year's mark.

Foreclosures also are running ahead of last year in Anoka, Dakota, Washington and Hennepin counties, though increases in those areas are less dramatic.

Joe Collins, a project manager with St. Paul's Planning and Economic Development office, said loss of income -- either through a lost job or diminished work hours -- often is the main reason for a mortgage default.


During the nine months ending March 31, 71 percent of the program's clients listed "job loss/income reduction" as the primary reason for defaulting on their mortgages, compared with 51 percent from Oct. 1, 2000, through Sept. 31, 2001.

The St. Paul foreclosure prevention program found that being "overextended" was the second most cited reason for mortgage default. Forty-four percent of its clients said as much during the nine-month period ending March 31. Many of those became overextended at least partly through refinancing their homes, Collins said.

Jan Bocklin, director of the Anoka County Community Action Program's home ownership program, says about three-quarters of her foreclosure clients have exacerbated their debt problems by refinancing.

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