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Other 46 States Start To Notice Sand States Caused Mortgage Meltdown
From the Associated Press:
By Alan Zibel
WASHINGTON â€” The nation's foreclosure crisis is centered in four states. But taxpayers across the country will feel the pain of bailing them out.
California, Florida, Nevada and Arizona generated about half of all foreclosure filings nationwide last year, according to RealtyTrac, even though residents in those states hold just a quarter of U.S. mortgages. Since mid-2007, skyrocketing foreclosures in those states have been magnifying the national rate.
As I reported last September, even though the four Sand States (which have 21% of the country's population) accounted for about half the foreclosures, they must have accounted for an even higher proportion of the defaulted dollars, which is the key variable in setting off the world financial crisis. That's because median home prices in California were almost triple that in the rest of the country at the peak of the bubble.
As lawmakers prepare to spend up to $100 billion in financial bailout money on a sweeping foreclosure prevention plan pushed by President-elect Barack Obama, the discrepancy is adding another layer to a problem already confounding economists, politicians and homeowners....
The Sunbelt states now in trouble are the same ones that for decades have taken jobs and residents from states in colder climates. Plus, states like California were also breeding grounds for toxic home loans.
Plus, the Sand States have really, really nice weather this time of the year (e.g., it's been sunny and 75 in LA for the past week), which doesn't decrease resentment, let me tell you. So bailout programs mean that fraudulent Sand State homebuyers can continue to sunbathe this winter in their foreclosed backyards, while taxpayers in the rest of the country huddle indoors and pay for them.
... To be sure, not all foreclosures are in the four states dominating the numbers. And not all borrowers acted irresponsibly. Consumer groups say legions of borrowers were duped into loans that they didn't understand, and deserve assistance.
To be sure, importing millions of people with grade school educations into the Sand States didn't boost the local average level of financial literacy.