By Annie Goeller, Daily Journal of Johnson County staff writer
More people are losing their homes because they can't make the payments after being laid off, and some banks no longer wait to foreclose on the owners, experts said.
After a slow start this year, the number of foreclosure filings in March spiked, jumping into the triple digits and hitting at least a two-year high.
In March, 121 foreclosures were filed, more than the total filings in January and February.
The monthly number was at least a two-year high, with the next closest number of filings at 120 in July 2008.
And the filings for April are already up, with 105 set for the month so far, according to the sheriff's office.
Experts said they didn't know why the numbers surged in March, but they believed two main factors were part of the reason: rising unemployment levels over the past six months and many banks no longer waiting to file foreclosures.
For the past six months, the county's unemployment rate has increased every month.
In October, the rate hit 5 percent. As of February, the unemployment rate was 8 percent, totaling more than 5,800 local workers out of a job.
As those numbers increase, so will the foreclosures, but they sometimes take months to show up, said Ron Dow, a professor of real estate and finance at the University of Indianapolis.
"These foreclosures may be from something that happened last year. The bank or mortgage company may have worked with the family for months," he said.
The owners may have tried to modify their loan. They may have gotten the bank to adjust their rate or their monthly payments. But none of that helps if they don't have a job anymore, Dow said.
Timothy Slaper, director of economic analysis for the Indiana Business Research Center, agreed with Dow.
Johnson County, along with much of central Indiana, has had a dramatic upswing in unemployment since the fall.
From December to January, the county's jobless rate increased nearly 1.5 percentage points, which equaled nearly 1,000 workers losing their jobs in that 31-day period.
That will have a large impact on foreclosures if many of those people couldn't afford their homes anymore without that income, Slaper said.
And there could be more to come.
One worry is whether the jobs lost so far will cause a ripple effect, casting out more jobs in entertainment, restaurants and other local businesses when customers can no longer afford the service because they lost their jobs, Dow said.
"When one job goes away, do another two go away? That's the concern," he said.
But that won't be known for a few months.
Some of the increase in the March filings could be explained by banks waiting to file foreclosures at the beginning of the year.
The filings also may have taken some time to show up because of the catch-up period from the holidays, Dow said.
Some banks might have waited to file foreclosures during the early part of the year because they wanted to learn more about the federal stimulus plan, he said.
With much of those details known in the past few weeks, the banks may have decided not to wait anymore.
Others could have been waiting for guidelines on how to work with struggling homeowners, Mutual Savings Bank President Bob Heuchan said.
Early this year, national lending agencies were working on guidelines for how banks and mortgage lenders could work with homeowners who were struggling to pay their mortgage, he said.
But those guidelines came out and didn't change much, so that may have prompted some banks to process some of the filings they had been waiting on, Heuchan said.