Housing fall was concentrated at first

WASHINGTON, March 7 (UPI) -- The U.S. financial crisis may have had its origins in mortgage foreclosures in just a few parts of the country, analysts said.

More than half of foreclosures in 2008 were recorded in 35 U.S. counties in 12 states, USA Today reported Friday. Those counties accounted for more than 1.5 million foreclosure actions last year, the newspaper said, citing its analysis of data compiled RealtyTrac, a real estate listing firm.

Those foreclosures spread out into a wave of foreclosures nationwide, sending banking into a tailspin and contributing to the worst economy in decades. William Lucy of the University of Virginia -- who has studied the connection between lenders and failed mortgages -- told USA Today the current crisis "was triggered by foreclosures, and a lot of those were in a very small number of areas."

As risk began to spread, he said "it became like a car with no reverse gear. Once it starts to go over the cliff, it's gone."

After the foreclosure wave spread from the first areas to be affected, it overwhelmed larger banks with heavy investments in mortgages, the report said.

Christopher Mayer of Columbia Business School said lending risks were spread so broadly in the financial sector that as the number of bad mortgages grew the result was a national credit crisis.

The 35 counties were the foreclosure wave seems to have started are around Detroit, Cleveland, Southern California, Las Vegas, Phoenix, South Florida and Washington, the newspaper said.