Monday, October 17, 2005

Storm Area Defaults Just Beginning

The Clarion Ledger finds that the hurricane damaged areas may not be the boomtowns some are reporting. "As Mississippi Gulf Coast residents fight mold, insurance companies and piles of debris, another obstacle lurks in the distance, foreclosure. Insurance claims usually pass on to mortgage companies, but many residents complain they are not getting enough, or any, relief from their homeowners' debt."

"'There are so many people who still owe $100,000, $150,000, $200,000 and don't have a house,' said Diamondhead resident David Hector. 'The flood insurance is just not enough.'"

"Mortgages among homeowners on the three coastal counties total 48,285, or 64.8 percent of residences, according to the 2000 census. About 17 percent, or 8,140 homeowners, have either second mortgages or home-equity loans."

"Any foreclosures are at least six months away, said Mike Fratantoni, economist for the Mortgage Bankers Association. Many mortgage companies granted a three-month grace period on payments after Hurricane Katrina, Fratantoni said. Firms could wait another three months of no payments before considering foreclosure. 'The timing is going to stretch out over a number of years,' he said."

"The frequency of delinquent payments and foreclosures were expected to rise in upcoming quarters nationwide, even before recent hurricanes, he said. Rising interest rates, the age of mortgages on the market and increasing energy costs were contributing factors."

"'Hector, whose home on the south side of Jourdan River was washed away, said only about 30 of his 300 neighbors have shown an interest in rebuilding. He said his friends have not considered the possibility of foreclosure because they are still negotiating with insurance companies. Hector did not have a mortgage on his home."

"'There are so many others who are going to be in a bad situation,' he said."


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