The national foreclosure nightmare is moving north, away from the four states that traditionally have accounted for most defaults and toward markets that heretofore have avoided the brunt of foreclosures and the economic and social problems they cause.

Here are some foreclosure factoids based on recent data from RealtyTrac that might surprise you: In April, Kansas City posted the largest foreclosure discount (the lower price foreclosures sell for in a market compared to normal homes). Chicago, not Phoenix or Las Vegas, has the largest inventory of unsold bank-owned foreclosures, and New Jersey posted the greatest increase in new foreclosures in April as well.

These are not the only Midwestern and Northeastern markets where foreclosures are on the rise. In fact, 11 of the nation’s 20 largest metropolitan areas posted annual increases in foreclosures in April, and all were in the East or Midwest. They included St. Louis (29 percent increase), Chicago (26 percent), Philadelphia (24 percent), and Atlanta (21 percent). Among the 20 largest metros, many of the cities posting the biggest annual drops in foreclosure activity were in the West or Southwest, including Seattle (54 percent down), Phoenix (44 percent), San Francisco (34 percent), Riverside-San Bernardino, Calif., (30 percent), and Los Angeles (28 percent).

In many Midwestern markets, the higher number of foreclosures is changing the mix of properties for sale, which has the effect of lowering the median listing price. The saturation of foreclosures for sale in Columbus, OH, is 31.5 percent, Minneapolis is 42.2 percent, Detroit is 49.1 percent, Chicago is 33.4 percent, and Dayton is 30.1 percent.

Why are foreclosures moving north?

Part of the reason the North is looking worse is that, by comparison, some of the foreclosure-soaked markets in the South and West are healing—especially Miami and Phoenix. In fact, prices improved faster in Phoenix in March than in any other market covered by the Case-Shiller Indexes.

A more important reason lies in the significant differences in the foreclosure picture of different regions. Northern markets are experiencing economic problems that differ from the four “sand” states where most foreclosures have occurred until recently: Arizona, California, Florida, and Nevada. Northern markets’ industrial employment bases are vulnerable to economic downturns, and their housing economies don’t attract retirees or investors like those in Florida or Arizona who will buy up bargains and build up demand. Moreover, few Midwestern markets experienced the boom from 2001 to 2006, which suggests they may not have as much upside potential. Nor did those markets experience the 2007-2009 bust—but unlike markets in Florida and other foreclosure areas, their prices are still dropping and are far from stabilized.

Finally, there is the issue of foreclosure processing. During the 18-month period between the Robogate scandal and the multistate agreement in March, lenders slowed the processing of foreclosures to reduce their liability—more in the 26 judicial states, where court orders are required to foreclose. Most of these states are in the Northeast and Midwest, and some have significant backlogs of foreclosures that threaten to lower home values when they finally come to market.

The day is coming when the Foreclosure Era will end due to the higher standards imposed by lenders following the housing crash in 2006. Every year that passes sees fewer defaults. The changing nature of the foreclosure threat poses serious challenges to local governments and communities; however, the outlook is that such challenges will be relatively short lived.