Actually he’s right and 1 in 147 sounds high for a national number. Foreclosures in the first six months jumped 170% in California, there were 104,572 unique properties in foreclosure which lead the nation and Florida was #2 with 64,250. The rub is that those foreclosures in CA and FLA are the most expensive homes in the country, the helocs and the spending are a huge part of every retailer in those two areas and probably every producer/manufacturer in the country, lose those and it all falls a few notches. It’s not the foreclosure itself that causes the loss, one or two on the street might lose a 100k for the bank each but the value of the other twenty houses just lost 50k each, 200k loss for the lender, a million loss for the neighborhood. Those people won’t or can’t pull the 50k out that some might have and don’t spend it and it ripples through the economy. Then in a few months some couple gets divorced and has to sell, they can’t because they are upside down and their odds of foreclosing increases, furthering the cycle. Then the company that sells widgets has 5% lower sales of their product and lays off 5% of their workforce who also end up foreclosed on. So yes, it’s not the actual number of foreclosures, it’s the effect it has on the broader market and that is by no means insignificant.
