Journal Article

The determinants of state foreclosure rates: investigating the case of Indiana

Abstract: Foreclosure rates are defined as mortgages in the foreclosure process as a percentage of all mortgages. These rates vary fairly dramatically across states. While the average foreclosure rate in the 50 states and the District of Columbia in the second quarter of 2007 was 1.25 percent, these rates ranged from a high of 3.60 percent in Ohio to a low of 0.44 percent in Wyoming. One state that has exhibited high foreclosure rates over the past decade is Indiana. Indiana ranked second highest after Ohio in the second quarter of 2007 with a foreclosure rate of 3.01 percent. The goal of this article is to look at the determinants of state foreclosure rates with particular attention to the set of factors referred to in discussions of Indiana?s high rates. Three primary factors have been responsible for Indiana?s high foreclosure rates: the poor performance of the housing market and economy, the high levels of subprime and FHA borrowing in the state, and the relatively long duration of Indiana foreclosures. However, even after taking these factors into account, Indiana?s foreclosure rates are higher than would be anticipated.

Keywords: Unemployment; Foreclosure;

Bibliographic Information

Provider: Federal Reserve Bank of Chicago

Part of Series: Profitwise

Publication Date: 2007

Issue: Dec

Pages: 1-7