In Pictures: The Severity Of The Foreclosure Crisis Depends On Where You Live

Foreclosures stories dominate the national housing news. It seems at least one foreclosure-related story makes its way to the front page or the nightly news every week.

But for as much as the foreclosure filing statistics can be astounding -- over 300,000 homes were served last month alone -- the prevalence of foreclosures depends on where you live.

As reported by RealtyTrac, just 4 states accounted for more than half of the country's foreclosure-related activity last month.

•California : 22.7 percent of all activity
•Florida : 14.9 percent of all activity
•Arizona : 6.7 percent of all activity
•Illinois : 5.7 percent of all activity
The other 46 states (and Washington D.C.) claimed the remaining 49.9%.

However, just because foreclosures are concentrated geographically, that doesn't make them less important to homebuyers around the country. There's been more than 1.4 million foreclosure filings in the last 12 months and that's a figure that can't be ignored.

Distressed properties now play a role in one-third of all home resales.

Therefore, if you're in the market for a foreclosed home, here's a few things to keep in mind.

1.Properties are usually sold "as-is" and may not be up to living standards. Be sure to physically inspect the home before buying it.
2.Buying a home from a bank is rarely as streamlined as buying from an individual homeowner. Be prepared for delays and long closings.
3.Foreclosures aren't always listed for sale publicly. Ask your real estate agent how to access the complete foreclosure inventory.


In order to use the federal homebuyer tax credit, you must be under contract for a home by April 30, 2010 and closed by June 30, 2010. That doesn't leave much time to find a bank-owned home and make it to closing. If you're serious about buying foreclosures, it's probably best to start your search soon.

Mortgage Approvals Are Getting More And More Scarce

The economy's improving but lending standards are not. Nationally, banks are making mortgage approvals harder to come by.

Underwriting guidelines are tightening.

The data comes from the Federal Reserve's quarterly survey to its member banks. The Fed asks senior bank loan officers around the country to report on "prime" residential mortgage guidelines over the most recent 3 months and whether they've tightened.

For the period October-December 2009:

•Roughly 1 in 4 banks said guidelines tightened
•Roughly 3 in 4 banks said guidelines were "basically unchanged"
Just 2 of 53 banks said its guidelines had loosened.

Combine the Fed's survey with recent underwriting updates from the FHA and generally tougher standards for conventional loans and it's clear that lenders are much more cautious about their loans than they were, say, in 2007.

Today's home buyers and would-be refinancers face a bevy of new borrowing hurdles including:

•Higher minimum FICO scores
•Larger downpayment requirements for purchases
•Larger equity positions for refinances
•Lower debt-to-income ratios
So, if you're on the fence about whether now is a good time to buy a home, or make that refi, consider acting sooner rather than later. It doesn't necessarily matter that mortgage rates are low, or that there's an up-to-$8,000 home purchase tax credit for households that qualify. With each passing quarter, fewer and fewer applicants are eligible to take advantage.