The number of foreclosure filings reported in the United States last month jumped 93 percent from July 2006 and rose 9 percent from June, the latest sign that homeowners are having trouble making payments and finding buyers during the national housing downturn.

Even though former Federal Reserve Chairman Alan Greenspan said housing would never burst like the stock market bubble did in the late 1990s because the country's real estate markets were too diverse and unconnected, it now appears that Greenspan's economic prognostications were wrong. The decline of home values will be felt in heartland cities like Chicago and Minneapolis, home to modest increases, and not just hot spots like the Northeast and California, where the bubble grew faster and burst quicker than other locations.

Posting views contrary to those espoused by Greenspan and his successor, new Fed Chairman Ben Bernanke, experts from Global Insight anticipate a decline of 4 percent, or roughly 10 percent in inflation-adjusted terms, between the peak earlier this year and the projected low point in 2009.
On an inflation-adjusted basis, the national median price -- the level at which half of all homes are more expensive and half are less -- the Times article authors cited information from the research firm Moody's Economy.com showing that a return to its 2007 peak may take another decade.

OHIO'S CUYAHOGA AND ITS STATE LEADING FORECLOSURE RATE

In its report on the saga of a rising tide of home foreclosures in Cuyahoga County, the state's most populous county, and the rest of Ohio, Policy Matters Ohio, an economic research firm, documented the number of foreclosure filings are growing in most Cuyahoga County municipalities. In fact, the number of filings increased in 38 out of 59 communities in the first half of 2007 compared to the first half of 2006.

And according to some sources, like the Mortgage Bankers Association, Ohio is ranked the state No. 1 in foreclosures. While 43 states experienced year-over-year increases in foreclosure activity, RealtyTrac identified five states -- California, Florida, Michigan, Ohio and Georgia - that accounted for more than half of the nation's total foreclosure filings.

Information from RealtyTrac showed that Ohio had 13,316 foreclosure filings in July, the number of filings from June rose 12 percent and that the rise in filings from July 2006 was about 143 percent. Even as far back as 2004, news reports sounded warnings of a problem that has now come home to roost.

Here's a graphic from the Times article making the connection between home foreclosures in Northeast Ohio and the region's general economic sluggishnesss.

To read what Ohio state officials are doing, here's a quick look at what Ohioans can expect from the governor and other state officials.

INDEBTEDNESS RISES AS HOME VALUES DECLINE

The American consumer, as we have been told over the years, represents two-thirds of the economy. So when the source of cash to spend as good American "consumeroids" are constantly told to do dries up, the party represented by spending hard earned dollars that should be saved but are not may be coming to an end.

In a study by Karen E. Dynan and Donald L. Kohn of the federal reserve board on the causes of The rising indebtedness of U.S. households, the authors first note that the personal saving rate has fallen from an average of 9.1 percent in the 1980s to an average of 1.7 percent so far this decade, and that between the same periods, the ratio of total household debt to aggregate personal income rose from 0.6 to 1.0.

Household borrowing, the authors say, is both under explored and closely related to household saving and that is it interesting now given the rapid pace of mortgage debt accumulation in recent years.

They say that the rise in house prices in recent years appears to have played the central role in household indebtedness and serve as the source of fuel for spending. They are say financial innovation, a factor now being realized in the credit crunch resulting from the meltdown in the nation's subprime mortgage market, seems to have boosted
debt, not primarily by increasing the share of households that are able to borrow but by
increasing the amount of debt held by households that already had some access to borrowing.

The subprime mortgage market, they say, contributes to the excessive accumulation of debt that has now contributed to the kind of financial distress that has caused many borrowers to be unable to meet their mortgage obligations now and into the near future when adjustable rates adjust upward, causing even more pressure for cash-poor borrowers.