Foreclosures cost Rhode Island $5.6 billion
Rhode Island is reeling from a $5.6 billion loss in wealth attributed to an onslaught of foreclosures across the state, according to a new report from HousingWorks RI. In the past two years, about 13,750 Rhode Island families felt the pangs of either a foreclosure or a serious mortgage delinquency, according to HousingWorks RI's annual foreclosure report. The state continues to outpace others in the region with foreclosure and delinquency rates 20% higher than those in Massachusetts, 17% higher than Connecticut, 34% higher than New Hampshire and 7% higher than the numbers recorded in Maine. The crisis is attributed to a dramatic rise in home prices early in the last decade — driven by a low supply of homes and heavy demand — and risky loan products that made up for a lack of affordability in the market by giving buyers higher loan amounts. HousingWorks RI, a coalition of community groups working for affordable housing in the state, said there were 1,886 residential foreclosure deeds filed last year, averaging 157 per month. In 2009, there were 2,852 foreclosures filed in Rhode Island. The good news is delinquencies managed to drop slightly in the fourth quarter of 2010. HousingWorks RI said each foreclosure puts financial pressure on the region, with every foreclosed home creating $34,000 in municipal costs, according to the report. The study concluded that homes in Rhode Island will continue to lose value through 2012. Write to Kerri Panchuk.