The Foreclosure Report

Lawmakers Focus On Foreclosure 'Disaster': NC

This Charlotte report show lawmakers are taking notice of the foreclosure disaster in North Carolina. "N.C. House leaders on Wednesday began forming a study committee to attack the growing problem of home foreclosures in Charlotte and across the state.Rep. Walter Church, who will chair the committee, says the effort was spurred by the Observer's series last week on the rising number of foreclosures in the Charlotte area."

"The problem of foreclosures is racing out of control, he says. In almost two decades as head of a savings and loan in Valdese, Church said he foreclosed on only five or six loans. The Observer reported that on average, 11 Mecklenburg County homes are now sold in foreclosure auctions every business day."

"After three missed payments, a home can be seized and sold to repay the lender. An explosion of new loan products over the past decade make it easier than ever to buy a home, and easier than ever to lose one."

"N.C. Commissioner of Banks Joseph Smith says he favors listing the name of the person who arranges a loan, generally a mortgage broker, on public real estate documents. That would allow investigators and the public to see which loan-sellers are connected with foreclosures. Smith said the skyrocketing number of foreclosures is 'a disaster.' The failure of so many loans could undermine public confidence in the mortgage lending industry, he warned."

"Philip Humphries, executive director of the N.C. Appraisal Board, says adding appraisers' names to public real estate documents also would be a good step if it helps reduce foreclosures. If an appraiser inflates the value of a home, borrowers can receive loans larger than the amount anyone else would pay for the house."

"Alfred Ripley with the N.C. Justice Center says his group wants better record-keeping on the causes of foreclosures, especially to see if some industry professionals are taking actions that contribute to the foreclosure problem. 'There are people in the marketplace who are misleading consumers,' he said."

"The Observer found Mecklenburg has the highest rate of foreclosures per capita in the state. Foreclosures in the county have more than quadrupled in the past six years. About two-thirds of those home-loan failures involve new types of loans designed for borrowers with lower incomes or problem credit. More than 80 percent involved homes valued at $150,000 or less."

"That combination of easy credit and inexpensive homes caused clusters of foreclosures on more than 70 Mecklenburg streets, where at least 15 percent of the homes foreclosed between 2003 and early 2005. That's at least five times higher than the failure rate on all loans in the U.S. The newspaper found the high foreclosure rates depressed surrounding property values, trapping neighbors in homes they couldn't sell, even if they paid their mortgages on time."

posted by Ben Jones @ 3:05 PM