Grim Foreclosure Increases in Mecklenburg

January 31st, 2008 | Tags: Foreclosure

Foreclosure listings in Mecklenburg County have risen by 51% in 2007 in comparison to 2006 – as per reports released by Charlotte Business Journal. According to another source there were 9,227 foreclosure notices (the number includes default and auction notices as well as bank repossessions). In 2005 and 2006 the numbers were 3,012 and 6,096 respectively.

In North Carolina foreclosures jumped by 67% - 37,426 in 2007. In comparison there were 15,921 and 22,476 in 2005 and 2006 respectively. According to reports from state officials 50,000 adjustable rate mortgages of the sub-prime mortgage had started from North Carolina in 2006. The borrowers who fell to these teaser rates did not have the sustaining power to keep up with rising interests. The opinion of the Center for Responsible Lending in Durham is that 17.5% made here in North Carolina during 2005 and 2006 will tragically end in foreclosures.

Nevada topped the list of foreclosures in 2007 with 3.4% of its houses entering the foreclosure zone at one stage or the other. Florida came second followed by Michigan, California and Colorado.

Across the country foreclosures increased by 75% in 2007 with over 2.2 million listings. There were about 1.3 million foreclosures in 2006 and 885,468 in 2005.

Despite measures taken by the Bush administration the overall picture is grim and far from satisfactory. The measures seemed to be palliative rather than remedial and hardly scratched the surface. The foreclosure years were preceded by the housing boom years when the sub-prime mortgage with its teaser rates led to a spate of heady intoxication in the real estate market. Loans were easily available and people snapped up house either to reside in or as tools of speculation and investment. The value of houses was falsely increased so that more loan funds could be released. No income proof was required and practically anybody with a pulse could get a loan. The agents were driven by high commissions while the lenders packaged the mortgages into parcels, sliced them up and used them as investment across the globe. Servicers were appointed to collect the monthly dues and the latter had no authority to modify loans. But when the interest rates began to rise after the initial honeymoon years things became nasty. With socio-economic ramifications there is a hue and cry and politicians are trying to cash in on the issue. Meanwhile the foreclosures march on relentlessly.