Janesville57.7°

Fall in foreclosures isn't likely to last

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JAMES P. LEUTE
October 22, 2008
— While Rock County still has some of the highest foreclosure numbers in the state, it was able to contain the rising tide that rolled over several other counties in the third quarter.

But because of the end of truck production in Janesville, the dip is likely to be more of a blip than the start of a trend, a UW-Whitewater professor said.


Between July and September, Rock County had 13.6 percent fewer foreclosure cases than for the same period in 2007, according to a report prepared by the Center for Community and Economic Development at the UW Extension. Of the seven counties in the state with the most foreclosure filings, only Rock and Waukesha counties posted declines.


On a statewide basis, foreclosure cases were up 6 percent from July through September.


Through the first nine months of the year, 616 Rock County homes were in the foreclosure process. That's 22.7 percent ahead of the pace set in 2007, when 502 cases were filed between January and September.


On a statewide basis, foreclosures are up 31.1 percent through September.


Russ Kashian, a UW-Whitewater economics professor, believes the foreclosure problem in Wisconsin has crested.


"It continues to be terrible, but it is not increasing in dramatic magnitude," he said.


Kashian said particular regions will continue to see increasing foreclosures, primarily because of recent economic troubles.


He includes Rock County on that list.


Earlier this year, General Motors announced that it would end second-shift production at its Janesville plant. That triggered layoffs of more than 1,300 workers at GM and its main supplier companies in Janesville.


Last week, GM said it would cease production in Janesville in December. The automaker and Lear Corp., one of GM's local suppliers, notified the state that they planned to lay off another 1,600 employees. Two other local suppliers told the state this week that they will lay off another 187 workers.


"It is my belief that the shutdown of GM and Lear will create a new housing problem in Janesville that is currently under the surface," Kashian said. "As a result, the decline may only be temporary."


Kashian said now is the time to prevent even more local foreclosures.


He suggests microfinancing, a provision of financial services that generally provides funding for struggling consumers.


He also would suggest local financial institutions make "small loans to bridge a small number of qualified individuals.


"If we can limit the damage, and there will be damage, we can limit the spillover," he said.


Nationwide, foreclosure rates were up 27 percent through August, according to RealtyTrac, a national watchdog on foreclosure rates.



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