West Virginia's Hidden Foreclosure Problem

Nearly 4,500 West Virginia homes and properties were amid or beginning foreclosure proceedings last year, a rate that puts it in the middle third of states, according to Mortgage Bankers Association figures cited by The Charleston Gazette.

The numbers starkly contrast often-cited figures from online foreclosure marketer RealtyTrac, which had ranked West Virginia as the third-lowest for foreclosure sales, counting just 473 that year.

"That ranking is widely cited by state officials," The Gazette said. "Lobbyists have used it at the Legislature to help kill anti-predatory mortgage proposals, arguing that it proves West Virginia has no foreclosure problem. Federal dollars for housing relief are increasingly keyed to foreclosure rate."

But the actual rate of foreclosure sales is at least five times higher, the newspaper found, after it collected numbers from the state's 55 county clerk's offices to find that "at least 2,550 West Virginia homes and businesses were sold in foreclosure in 2007."

That equals about one out of every 344 housing units in the state (or about one out of every 217 owner-occupied housing units, according to Census estimates; either figure reflects less than 1 percent of total or owner-occupied units)

The article notes that "the courthouse count does not include homes lost to bankruptcy, homes sold or given back to the bank to avoid bankruptcy, mortgages tied up in court proceedings or, for the most part, mobile homes."

RealtyTrac explains that as it starts with the most densely populated counties to perform its research, "West Virginia - and other sparsely populated rural states - are low priority."

"West Virginia's foreclosure situation, while it's not terrible, is not as good as everybody has been claiming it to be," Edward Prescott, vice president of research for the Richmond Federal Reserve Bank, told The Gazette. "It's generally in the middle."

The Gazette's special report also offers a map with county-by-county details, a graphic the highlights RealtyTrac's underreporting, and a chart showing a doubling of mortgages since 2000. There's also audio.