The Mortgage Bankers Association (MBA) released nationwide foreclosure statistics this week, showing that California, Florida, Nevada and Arizona "have more than one-third of the nation’s subprime ARMs, more than one-third of the foreclosure starts on subprime ARMs, and are responsible for most of the nationwide increase in foreclosure actions". The worst foreclosure states are Ohio and Michigan, followed closely by Indiana, Illinois, Kentucky, Tennessee and Pennsylvania. Thirty percent of the subprime mortgages in Cleveland have gone bad. "They were making loans to anyone that had a pulse," even though economic conditions in those areas were already bad according to Jim Rokakis, the treasurer in Cuyahoga County, Ohio. Locally, the MBA reported that California has 17% of the subprime ARMs in the country and over 19% of the foreclosure starts on subprime ARMs. Does this spell gloom and doom for California? Not necessarily! California has a disproportionately high share of investor loans, or loans for non-owner occupied rental homes, and these investor loans account for a big chunk of the California foreclosures. A whopping 21% of the loans currently in default in California are these investor loans as compared to 13% for the rest of the nation. Many of these investors (or speculators) are simply walking away from these homes since home prices are no longer increasing at the insane rates that they were in recent years. Where are the California foreclosure hot spots? The worst area in the state is Riverside County, with Yuba, Sacramento and San Joaqin Counties reporting poor numbers as well. In the Los Angeles County area, ForeclosureRadarTM shows that the only area with a high rate of foreclosures is the City of Palmdale as of the 2nd quarter of 2007. The MBA says that on a nationwide basis, "thirty four states had decreases in their rates of new foreclosure and the increases were very modest in the states with increases, other than those four" (California, Florida, Nevada and Arizona). | 
