Monday, January 08, 2007

"Unrealistic Appraisals" In North Carolina

The Winston Salem Journal reports from North Carolina. "The pace of foreclosures in Forsyth County slowed in 2006 but still rose by 2.8 percent, according to data released yesterday by the N.C. Administrative Office of the Courts. There were 1,864 foreclosed homes in Forsyth last year, compared with 1,813 in 2005 and 1,592 in 2004."

"By comparison, Guilford County's foreclosure rate rose 7.2percent, Wake County's was up 6.8percent, Durham County's was up 8.4 percent, and Mecklenburg County's was up 12.9 percent. Forsyth's foreclosure rate was up 174 percent from 1998, when there were 680 foreclosures."

"'But overall, what we need to focus on is that Forsyth's rate, like most counties in North Carolina, has gotten dramatically worse in the past eight years,' said Al Ripley, the director of the Consumer Action Network for the N.C. Justice Center."

"The three main causes of foreclosure, according to analysts, are typically divorce, health crisis or job loss. There also has been an increase in foreclosures connected to lenders and potential homebuyers pursuing increasingly creative, and risky, mortgage strategies."

"Local officials said they believe that more consumer education on mortgage loans, along with programs aimed at assisting homeowners who have lost their jobs, have contributed to the slowdown in foreclosures. 'I will tell you that the calls are coming in fast and furious here for foreclosure-prevention counseling, a trend we expect to continue as the ARMs adjust upward,' said Kathy Banks, an official with Consumer Credit Counseling Service of Forsyth County Inc."

"Banks said that Forsyth has been fortunate not to have had entire neighborhoods go into foreclosure, which has been the case in some neighborhoods in the Charlotte area. She said that the main detrimental factors in those neighborhoods have been 'unrealistically high appraisals of homes' and mortgage products that result in homes being financed at more than 100 percent of market value."

"In Northwest North Carolina, Davie County had the highest rate of increase in foreclosures at 28 percent - from 137 homes in 2005 to 176 homes in 2006."


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