Foreclosure crisis deconstructed

The bulk of home foreclosures in Missouri are concentrated in low-income census tracts in the state’s urban centers, according to a senior economist with the Federal Reserve Bank of Kansas City.

In some of those pockets, which include parts of eastern St. Louis and north Springfield, more than 5 percent of mortgages have entered foreclosure, said economist Kelly Edmiston during a session entitled “Fighting Foreclosures in Missouri.”

Despite a severe spike in foreclosures in the Show-Me State last year, home loan defaults still haven’t reached an all-time high, Edmiston said. But Missouri is very near an all-time high for new foreclosures, he noted.

Edmiston said three “broad factors” are contributing to the skyrocketing number of foreclosures in Missouri and throughout the country: the increasing share of nonprime and subprime mortgages,

nontraditional loans with adjustable interest rates and the inability of homeowners to sell their homes for enough money to pay off the loan and avert foreclosure.

Chris Krehmeyer with the Missouri Homeownership Preservation Network said there is a support system for people facing foreclosure and directed them to call (888) 995-HOPE for assistance. About 25 percent of people who call the hotline have been able to avoid foreclosure, Krehmeyer said.

“Phone calls from Missouri are off the charts to this national hotline,” he said.