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Home > BizTimes Daily > Archives > July 10, 2007
Housing foreclosures not a problem in stateline region
Published July 10, 2007 - BizTimes Daily
Despite the national sub-prime housing market collapse, dramatic increases in foreclosures and bank failures are not eminent for the Whitewater region, according to the latest issue of the Stateline Regional Economic Report.
The report is produced by Fiscal and Economic Research Center at the University of Wisconsin-Whitewater.
As foreclosures and bank failures increase across the country, the stateline region, which includes the counties of Rock, Jefferson, Walworth, Green and Lafayette, has not followed the trend, said Russ Kashian, urban and regional economist.
The subprime market is populated by people who typically have low credit scores and histories of payment delinquencies, charge-offs or bankruptcies. Those borrowers could not qualify for favorable interest rates and in the end, pay higher rates. The projected problem with the subprime meltdown is that it will leak into the general economy and cause a financial crisis.
"This is not the 1980s," Kashian said. "I don¹t foresee a repeat of the saving and loan debacle."
According to the Stateline Economic Report, loan delinquencies are not rising in the region. While they may be rising at the larger city banks, local community banks have been successful in avoiding the negative impact of the subprime market, the report concluded.
"Foreclosures are going to be highly concentrated in certain neighborhoods because the under-the-table income has dried up," Kashian said. "This isn¹t going to create a financial problem for the economy, but it will create a social displacement issue."
Kashian noted the icy housing market, saying, "More and more houses are for sale, but people aren¹t buying."
