For The Second Month In A Row, Foreclosures Are Concentrated In 3 States

For the second month in a row, the country's foreclosure activity was dominated by a small number of states.

As shown by the latest stats from RealtyTrac.com, more than half of the country's foreclosure actions from April were concentrated in just 3 states:

1. California
2. Florida
3. Nevada

Those 3 states are home to but 19 percent of the U.S. population.

No matter in which state you live, however, it's important to understand the far-reaching ramifications of foreclosures.

Although real estate is local, mortgage lending is not.  Fannie Mae and Freddie Mac insure loans in all 50 states and when those mortgages go into default, the government entities often take losses.

This is the primary reason both Fannie and Freddie asked for government aid to the tune of $19 billion and $6 billion, respectively, last week.  It's also the reason why loan fees have increased over the last 12 months — another way to shore up balance sheets is to raise consumer charges.

Furthermore, down payment requirements are larger than before foreclosures proliferated and private mortgage insurance is more expensive, too.

These are important changes to homeowners in all states — not just the 3 named above.  In some cases, they can be the difference between a home loan approval and an underwriting turn down.