Seth Rosen has an interesting article in this morning’s Daily Progress tackling the rise in foreclosures in the Charlottesville/Central Virginia area.
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:
“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.
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.