Indiana foreclosures 5th highest in nation

The state was fifth in the percent of foreclosure inventory at the end of the third quarter in September, the association's National Delinquency Survey revealed.

At 3.59 percent of all loans in foreclosure, Indiana was topped only by Arizona at 3.86, California at 3.90, Ohio at 3.93 and Nevada at 5.58 percent.

The reasons, however, are different for Indiana than for the four states ranked higher.

Sam Khater, senior economist with First American CoreLogic, a nationwide provider of residential mortgage risk management and fraud protection technology, said Indiana has had foreclosure issues for some time.

"But the United States is quickly catching up," he said.

Khater said a drop in home prices coupled with job loss hit Indiana hard.

"Indiana lost 1.1 percent of its employment base in the last year" Khater said. "That's not a good combination."

Many of Northwest Indiana's foreclosures can be directly linked to the auto industry.

"Traditionally we've been a manufacturing state," said Peter Novak Jr., CEO of Greater Northwest Indiana Association of Realtors based in Merrillville. "We've always had that tie to the steel and auto markets. Our local mills are laying off and auto is a component of that."

The home value depreciation coupled with job loss has had an impact on Northwest Indiana's foreclosure rate.

Market hasn't hit bottom yet

Alan Thorup, executive director for the Indiana Mortgage Bankers Association, said nationally delinquencies have gone up.

In the Hoosier state, 9.31 percent of all loans were past due by at least 30 days, Thorup said.

"If you look at the second quarter report, 7.97 percent were past due 30 days," Thorup said. "That ranked us number four.

"It's certainly challenging out there with these numbers but we'll have to live with it awhile," Thorup said.

Economic experts anticipate the market won't turn around for another year, Thorup added.

According to CoreLogic, Lake County foreclosure rates were 2.9 percent in October, compared to 2.7 percent a year ago. Porter County's was 1.4 percent versus 1.3 percent last year. Indiana foreclosures in October were 2 percent versus 1.9 nationwide, compared to 1.7 percent versus 1 percent nationwide a year ago in October.

If there's any good news, it's that Indiana is near the middle in terms of home appreciation.

"As of Sept. 30, Indiana had a 1-year housing price index decline of .02 percent," Thorup said. That compares to an overall 4 percent decline nationally.

"This puts us at 19th in the country," Thorup said. That means Indiana isn't suffering large declines in value as Arizona and Nevada, where the housing bubble exploded.

"Our values have held steady till just now," Thorup said.

"Everyone's just trying to weather the storm," Novak said. "We're pushing for Congress to stabilize things. We're hoping the consumer is enticed with lower interest rates and tax credits."