Record foreclosures in the Charlottesville area?

Seth Rosen has an interesting article in this morning’s Daily Progress (no longer available) tackling the rise in foreclosures in the Charlottesville/Central Virginia area. 

There is plenty of culpability to go around – lenders, appraisers (archived: 2013) (HT: Property Grunt) Realtors and, don’t forget – the buyers.

I wrote a story a couple of months ago looking at the impact the subprime market will have on the Charlottesville market, as well as here. (even more on subprime (archived: 2016))

During the first three months of 2007, there were 128 notices of foreclosure filed with The Daily Progress, a 27 percent increase over the same period in 2006.

Doug Duncan, chief economist for the Mortgage Bankers Association of America, said in 2003:

“(The foreclosure rate) reflects expansion of mortgage markets. Borrowers today who never would have obtained a loan now have a loan. The risk parameters have been expanded and there are more delinquencies,” Duncan said.

Michael Martin, a local loan officer, says in today’s DP (no longer available):

“There’s a lot of people out there who are in homes that really should never have been given a loan,” Martin said. “And it’s the people who are most vulnerable that have been taken advantage of. There’s a whole vulture system out there that preys on these people.”

Per Google, the fear of foreclosure seems to be fairly consistent over the years.

Cvillenews beat me to the story this morning.

One thing I would like to see is this – any lender or Realtor making comments about the state of the market should also state what percentage of their business these Pay-option-ARM loans, Interest-Only ARMs (good products when used appropriately), etc. comprise.

My disclosure: One Option-ARM (not my advice). Approximately 20% Interest-Only to buyers who fully understood the risks, and the rest cash and fixed-rate loans.