127,185 New Listings - Last update: December 10, 2009 - 08:12 AM EST
The foreclosure wave rises and takes with it a head every half a minute. The situation is three times worse than what it was two years ago, according to reliable online tracking statistics. The concentrations vary from one area to another. For instance Jefferson County is better compared to the figures in Washington and the country. In August the figures in Jefferson are 1:3,105, which is 35% higher than 1:4,198 during the first three months of 2005. The national foreclosure rate has more than trebled from 1:1,722 to 1:510. In Jefferson the rate is one sixth of the national rate and half of that of Washington (1:1370). In King County and Kitsap County the proportion is 1:1,496 and 1:1,488 respectively. Jefferson County is better off than 39 other states. Nevada is the worst hit mainly due to Las Vegas. The ratio is 1:165.
Foreclosures pop up when a house is refinanced with the objective of roping in extra cash. This happened during the time of the property boom. When mortgage rates rise, when there is a job loss, when the value of the house becomes less than the mortgage dues, when the house owner is unable to get a satisfactory buyer the inevitable happens – up looms the ogre of foreclosure. It is those who opted for the sub-prime category of mortgage who are worst affected. They were the ones who could not go for a prime loan because of marginal and undocumented income.
Individual cases will further bring into focus the plight of ordinary folks. Kevin and Amanda originally bought a house for $160,000 in February 2005. Their mortgage dues at that time were $1,300 per month. Amanda wanting to set up a day care business borrowed $270,000 from the sub-prime market, which meant she had to pay interest only. It worked out to $2,000 per month. But after six months her business began to flounder. Kevin too lost his job and soon they found themselves behind in payments. The mortgage balance became more than the current value of the house. Doomed with foreclosure they have moved to a mobile house to survive.
But even without personal crisis foreclosures can arm-twist the borrower when interest as well as property taxes shoots up. The nation is waiting for a panacea for this disease known as foreclosure that has gripped the country.
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One Response
That is pretty amazing when it’s put that way. In fact, in the one minute it took to write this comment, another two families behind on their mortgage are now being sued by the bank for foreclosure. Possibly the worst part is that the large number of adjustable rate mortgages made over the last few years will not even reach their peak of resetting until early 2008. So, there is little reason to look forward to the near future, if you are a homeowner already beginning to feel a financial squeeze.