Newswire:

New Orleans Faces A Storm Of Foreclosures

As if New Orleans hasn’t been through enough since Hurricane Katrina sacked it in 2005. Lately, news about delayed reconstruction, toxic FEMA trailers, and corruption has dominated the headlines. [USA Today]

Now residents in the Big Easy are facing another challenge. Homeowners trying to rebuild from the floods of 2005 are increasingly facing a new adversary: foreclosures. As housing repair bills mount, so does the pressure to make their primary housing payments.

Foreclosures have hit nearly every pocket of the U.S. hard, so mortgage problems are everywhere. But they’ve hit particularly hard in the storm-torn regions because so many Gulf Coast residents have set aside so much of their incomes and financial aid for repairs made necessary after Hurricane Katrina.

Self-imposed moratoriums on mortgage payments by banks in Louisiana and Mississippi expired last year, and there are fewer sources to turn to for aid.

Louisiana and Mississippi were initially not hit as hard by the mortgage crisis as other states because homes there were not particularly overvalued, said Sal Bernadas of the Louisiana Mortgage Lenders Association.

That trend, though, is starting to change.

During the fourth quarter of 2007, 900,000 households were in the foreclosure process, the highest number ever recorded and up 71 percent over 2006. [American Progress]

The perfect storm?

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