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Foreclosures Rise in New Sign of Housing Market Trouble

New government numbers show that home foreclosures increased 24 percent in the first quarter of this year as compared to the first quarter of 2008 as a voluntary foreclosure moratorium ended on March 31. Analysts discuss the data and the president's program to help troubled homeowners.

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    A bad situation has suddenly become worse. As we heard earlier in the program, foreclosures spiked sharply upward in the first quarter of the year, this despite a number of efforts initiated by government and major lenders.

    We look at what's happening and why with John Vogel, professor of real estate at the Tuck School of Business at Dartmouth College. And we hope to be joined soon by Susan Wachter of the University of Pennsylvania. She's also a professor of real estate and co-director of its Institute for Urban Research. We're working on technical difficulties and hope to have her join us.

    John Vogel, let's start with why the increase. What's going on?

    JOHN VOGEL, Tuck School of Business, Dartmouth College:  Good evening, Jeffrey. A couple of very simple things: We have unemployment. We have the economic problems. That's causing part of the problem. And another part of the problem is the end of the moratorium, so banks have started foreclosing again.


    Let's — explain the moratorium. Remind us what that meant, who participated, and why is it coming to an end?


    Most of the major lenders, Fannie Mae, Freddie Mac, and a number of the major banks all participated in the moratorium because the government asked them to hold off on foreclosure while they developed the Obama plan to prevent foreclosures. But it was time-limited, and now the time has run out, and these banks have gone back to foreclosing.


    And in terms of how the economy affects all this, there it sounds like a bit of a vicious cycle, right? Since it was the housing problem that got a lot of this going, and therefore now we have a lot of unemployment, and therefore that, what, leads to more foreclosures?


    Exactly right. It is a vicious cycle. And I'd love to see a way to bring it to a halt. I have a few ideas about that, but we'll discuss that during the show.