Foreclosures accelerated nationwide during the second quarter, with an estimated 1,700 mortgages in Rhode Island falling into foreclosure proceedings, according to a national report released on Friday by the Mortgage Bankers Association in Washington. Rhode Island now ranks sixth highest nationally in foreclosure initiations during April, May and June. Tumbling house prices, tight credit markets, a bloated inventory of unsold houses and a weak job market continue to hamper the housing market recovery here. Rhode Island's unemployment rate in July was 7.7 percent. Nationally, the unemployment rate rose from 5.7 percent to 6.1 percent in August, and the nation lost 84,000 nonfarm payroll jobs. Foreclosures nationally accelerated to the fastest pace in almost three decades, as interest rates rose and house values fell, prompting more Americans to walk away from homes they couldn't refinance or sell. Nationally, the foreclosure rate during the second quarter was 2.75 percent, according to the Mortgage Bankers. (The rate includes all loans in foreclosure as of June 30.) Rhode Island's foreclosure rate was 3 percent. Massachusetts' rate was 2.07 percent. In Rhode Island, 1.22 percent of the state's estimated 140,232 home mortgages serviced began foreclosure process in April, May and June, Mortgage Bankers said.
