Sunday, April 16, 2006

Rhode Island Defaults Up 50%

The Providence Journal has this update on defaults in Rhode Island. "During the first quarter of this year, the number of foreclosure sale notices in The Providence Journal jumped nearly 50 percent, compared with the first quarter of last year. During January, February and March, there were 304 foreclosure sale notices, compared with 205 during the same three months last year. About half of the notices, 147, were for houses in Providence; another 136 were in Warwick, Cranston, East Providence, Johnston, North Providence and Pawtucket."

"Affluent communities were not exempt. Among the listings were five foreclosure sales in Barrington and three in East Greenwich."

"Providence County alone had 169 properties listed as REO sales as of Tuesday. 'We probably average one a day,' said Michael Riley Sr., a real estate agent in Cranston. He and his wife, broker Joy Riley, work for big banks or mortgage companies to market foreclosed houses. Back in the early 1990s, their business flourished amidst the ruins of the state's banking crisis."

"Lenders often want to try to sell a property 'as is,' he said, but sometimes they can't. Selling is hard these days, because there are so many houses on the market. As of last week, there were 5,288 'active' listings for single-family houses in the state."

"Most of the houses in foreclosure were bought with risky, zero-down mortgages or refinanced so the borrower could take cash out, said broker Joy Riley. She said the problem stems from mortgage brokers selling risky loans and buyers who were too eager to cash out the equity in their houses."

"'People were using their homes like they were ATM machines,' Riley said. 'Insurance is going up, taxes are going up, they can see rates are going up, so people find themselves saying, 'I can't pay anymore!'"


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