The Foreclosure Report

'Paying The Piper' In Delaware

The News Journal in Delaware has this report on foreclosures. "A new study that found growing financial pressures are putting more people at risk of losing their homes. 'We know interest rates are going up and that, in turn, increases costs for people with adjustable-rate mortgages, which can contribute to foreclosures,' said Christina Hardin-Dirksen, for the Delaware Housing Authority. 'We would anticipate we'll see the foreclosure rate in Delaware rise.'"

"The average rate on a mortgage that adjusts annually has shot up to 6.09 percent compared with 4.09 percent in May 2004, before the Fed began its series of rate hikes. 'People better pay attention to what they're doing in Washington,' said state Rep. Helene M. Keeley, D-Wilmington South, a member of the state's Foreclosure Study Advisory Committee. 'There are people with [adjustable-rate] mortgages who are going to be paying the piper. It's going to be a wake-up call.'"

"A study, which relied on data from the state Judicial Information Center, found that foreclosure filings were up 51.6 percent in Delaware during the past five years."

"Edmound Yousefkhanian, a Bear homeowner, said homeowners taking out adjustable-rate mortgages with attractive initial interest rates could end up in foreclosure when those rates start to climb. Under certain mortgages, borrowers are initially paying only the interest, making for low payments at first, but those payments spike upward after a few years when the homeowner must repay both principal and interest. 'These mortgages can be a trap,' Yousefkhanian said."

posted by Ben Jones @ 11:04 AM