Foreclosures Again on the Rise in Kansas and Missouri

The cases of foreclosure listings are on the rise. Although economy experts and financial professionals have gone on to say that the economy is looking upwards, there are still cases of homes being lost and jobs no more being safe. Although “J.P Morgan”, the behemoth of the banking industry has earned approximately $3.6 billion in just one quarter in the last year still reports are there of unemployment being up at 10%. The stock markets too look bullish as “Dow Jones” index hit ten thousand in 2009 for the first time. The question is, if things are so hunky dory then why are foreclosure levels at an all time high across the length and breadth of the country, especially in Missouri and Kansas?

Reports by “Kansas City Business Journal” states that foreclosure cases in Missouri rose by 8.8% as compared to last year in the month of September. Another report by “RealtyTrac Inc” from California says that foreclosure filings have shot up by 22.4% in the state of Kansas. This is being witnessed throughout the country. Even though foreclosure cases dropped by 4% in September as compared to August as according to reports from 343,638 homes, it only revealed a 29% upward trend from last year September.

According to various financial experts, the reason that this is happening is that the banking firms have changed the lending procedure. When the banks had been given financial aid in 2008 by the Government, that is when they moved away from lending money in the earlier fashion that they were used to. Earlier the banks had always profited by giving credit to medium scale enterprises which had led to the job boom. About 64% jobs were developed in the last fifteen years. Now banks are earning by the taxes that people pay, and are investing that sum into other commercial schemes. In the process, small firms are feeling the heat and leading to job losses. According to Peter Kyle, who is a professor of finance in Maryland University- if the economy revives, then all business sectors would be requiring further credit, but medium and small industries are still trying to turn around and this might take a while. He also feels that as things improve small industries are going to protest about credit policies.

It is no use blaming the banks as they had been hit the hardest by the recession, so naturally they would be a tad cautious about giving credit.

David Kotok says that the banking sector has not recovered as it should have, and that the small sectors have an advantage which is, cheap borrowing and low interest rates.

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