Bleak Outlook for Bad Loans Plagues Midwest.

Detroit -- The future for the Midwest doesn't look too bright as industry insiders forecast a likely rise in 2006 foreclosures for the economically challenged region and the rest of the United States. Michigan is among states in the Midwest with the worst outlook. Detroit's regional economy continues to take a dive as home appreciation is almost nonexistent and jobs in the once-vibrant auto industry continue to decline here.

Across the country foreclosures rose at the end of 2005, but foreclosed properties were modest for the year when compared to previous years. According to online foreclosure property inventory giant, Foreclosure.com, the number of foreclosed residential properties for sale rose more than 12% from November to December of 2005. The Midwest had the second-highest number of new foreclosed properties for sale. The South took the No. 1 spot for the most foreclosures during the period. Among the Southern states were areas affected by the recent hurricane devastation.

For the month of December, Michigan had 7,955 total foreclosed properties for sale and 2,064 new foreclosures listed. Ohio continues to top the Wolverine state with 8,419 total foreclosed properties listed for sale and 2,380 new properties listed.

Brad Geisen, president and CEO of Foreclosure.com, said over the past several years foreclosures in the U.S. saw a slow decline. Mr. Geisen predicts that decline will end in 2006. "Last quarter we saw foreclosures increase in every area of the country," he said. "We're starting to see the same level of inventory increase in the month of January."

Among the high level of foreclosures in the U.S., vacation homes are increasing among properties as consumers try to save their primary residence.

"Layoffs in the Midwest are a big contributing factor to foreclosures in that region," Mr. Geisen said. "Interest rates going up are another big factor. Interest rates are a problem for buyers who bought more property than they can afford."