The Foreclosure Report

ARMs make Up 17% Of South Carolina Loans

The State has a report on foreclosures in South Carolina. "Fewer Columbia-area residents lost their homes to foreclosure in 2005, but rising interest rates and higher living costs might increase pressure on homeowners this year, some industry watchers say. Thousands of homeowners with adjustable-rate mortgages could see their monthly payments increase because short-term interest rates have risen 3.5 percent over the past 18 months.'

"'That’s a perfect storm scenario for a homeowner about to be in trouble,' said Rick Sharga, vice president of marketing for RealtyTrac."

"In Richland County, 1,436 people lost a home to foreclosure in 2005, down 9 percent from 2004. In Lexington County, 673 homes were sold at foreclosure sales in 2005, down 4 percent from 2004."

"The Mortgage Bankers Association’s 2005 third-quarter report says about a fifth of the S.C. homeowners who got behind in their mortgage payments wound up in foreclosure. Statewide, 563,850 loans were serviced as of the third quarter, the latest data available, according to the association. About 5.7 percent of all loans were past due, but only 1.8 percent were actually in foreclosure."

"Still, those who work in and follow the mortgage business say the foreclosure rates might increase in 2006. 'I would imagine they’re going to rise,' said Mark Vitner, a Wachovia economist."

"This year, the warning of a possible increase in foreclosure rates comes as thousands of homeowners who bought into adjustable-rate mortgages reach the end of their low, introductory interest rates. The ARM loans have been around for years but increased in popularity when interest rates reached historic lows in 2004."

"During three quarters in 2005, 93,905 ARM loans were serviced in South Carolina, about 17 percent of all mortgages. Ralph C. Taylor, president of 1st Choice Mortgage in Columbia, said he has seen more customers who want to refinance their homes to get out of their ARM loans. 'Everybody that has an ARM is going to be in payment shock,' he said."

posted by Ben Jones @ 8:12 AM