
{"id":8871,"date":"2010-01-28T10:21:19","date_gmt":"2010-01-28T18:21:19","guid":{"rendered":"http:\/\/www.carrborocitizen.com\/main\/?p=8871"},"modified":"2010-01-28T10:21:19","modified_gmt":"2010-01-28T18:21:19","slug":"prime-rate-foreclosures-surge-in-nc","status":"publish","type":"post","link":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/2010\/01\/28\/prime-rate-foreclosures-surge-in-nc\/","title":{"rendered":"Prime rate foreclosures surge in NC"},"content":{"rendered":"<p><strong>Rich Fowler<br \/>\n<\/strong><em>Staff Writer<br \/>\n<\/em><br \/>\nWarmer weather may be on the horizon, but don\u00e2\u20ac\u2122t expect that to translate into a hot housing market. Uncertainty about the economy is one reason the market is tepid. Another is that the number of foreclosures continues to be high and new data on the types of filings points to a rise among traditionally safer borrowers.<!--more--><\/p>\n<p>Total mortgage foreclosure filings were up more than 17 percent statewide from 2008 to 2009, according to data from the N.C. Administrative Office of the Courts. The office tracks both commercial and residential filings in North Carolina, which, combined, rose from 53,960 in 2008 to 63,341 in 2009.<\/p>\n<p>To make matters worse, two-thirds of current foreclosure filings are on prime loans, which are supposed to be much less risky for lenders than the subprime loans that started the foreclosure crisis, according to Chief Deputy Commissioner of Banks Mark Pearce. <\/p>\n<p>Prime borrowers with fixed-rate mortgages are the highest-growth segment of foreclosures, according to, Roberto Quercia, director of the UNC Center for Community Capital. <\/p>\n<p>\u00e2\u20ac\u0153They have nothing to do with subprime [loans],\u00e2\u20ac\u009d Quercia said. \u00e2\u20ac\u0153They have nothing to do with people in unstable employment or with poor credit.<\/p>\n<p>They\u00e2\u20ac\u2122re just main-street, middle-class families that are \u00e2\u20ac\u00a6 suffering from unemployment or other issues and are having trouble meeting mortgage payments.\u00e2\u20ac\u009d<\/p>\n<p>Pearce\u00e2\u20ac\u2122s agency administers the State Home Foreclosure Prevention Project, an effort to get borrowers in contact with more than 200 loan servicers and 26 counseling agencies statewide. <\/p>\n<p>When the project started 18 months ago, the agency was more concerned about the number of homeowners who were threatened by subprime loans that were engineered to automatically increase payments, making the loans unaffordable as soon as the ink was dry on the paperwork. Now the agency has expanded the program to borrowers who are struggling to make their mortgage payments by opening a telephone hotline that lets all North Carolina homeowners tap into the project\u00e2\u20ac\u2122s network of counseling agencies.<\/p>\n<p>Pearce is glad the program has saved more than 2,500 homeowners from foreclosure and gotten another 5,000 to meet with housing counselors about finances and look for ways to avoid foreclosure. <\/p>\n<p>\u00e2\u20ac\u0153We always would like to be able to do more,\u00e2\u20ac\u009d Pearce said. \u00e2\u20ac\u0153We would like to reach more people, and still too often we find that people aren\u00e2\u20ac\u2122t calling us to take advantage of the resources we have.\u00e2\u20ac\u009d<\/p>\n<p>According to a recent study by the Conference of State Bank Supervisors, only 40 percent of borrowers who are seriously behind on their loans are involved in any kind of program to get help.<\/p>\n<p><strong>Bad practices<br \/>\n<\/strong><br \/>\nAl Ripley, a lawyer with the N.C. Justice Center, says that bad lending practices are still a large part of the problem. <\/p>\n<p>\u00e2\u20ac\u0153There\u00e2\u20ac\u2122s still a lot of people out there that are in these awful loans who, however they\u00e2\u20ac\u2122ve managed to do it, have scraped money together, lived on credit cards, but are basically trying to keep that payment floating and going, and then you run out of ways of paying that higher payment.\u00e2\u20ac\u009d<\/p>\n<p>Ripley says these people don\u00e2\u20ac\u2122t have the income, can\u00e2\u20ac\u2122t refinance because the value of the home has gone down and have used up other types of credit, such as credit cards.<\/p>\n<p>\u00e2\u20ac\u0153So in that kind of circumstance, they\u00e2\u20ac\u2122re stuck,\u00e2\u20ac\u009d Ripley said. \u00e2\u20ac\u0153They\u00e2\u20ac\u2122re upside-down on the loan, they can\u00e2\u20ac\u2122t refinance, they\u00e2\u20ac\u2122re in default, the HAMP [Home Affordable Modification Program] program isn\u00e2\u20ac\u2122t working, the HARP [Home Affordable Refinance Program] program isn\u00e2\u20ac\u2122t working, so they\u00e2\u20ac\u2122re going to lose the house, and it\u00e2\u20ac\u2122s just a very difficult situation for them to be in.\u00e2\u20ac\u009d<\/p>\n<p>The federal HAMP program has been sharply criticized for its lack of performance: By the end of 2009, out of over 3.3 million eligible loans, servicing companies had only been able to permanently modify a little more than 66,000 loans, with approximately 46,000 still waiting for the final paperwork.<\/p>\n<p>Ripley has been frustrated by the inability of servicers to help his clients through the HAMP program. \u00e2\u20ac\u0153What we\u00e2\u20ac\u2122re literally seeing are servicing companies that on the one hand say to a homeowner, \u00e2\u20ac\u02dcYeah, you can apply for the HAMP program to modify your loan, or the HARP program to try to refinance.\u00e2\u20ac\u2122 And the homeowner does that, and then they get a foreclosure notice literally the next week, before they\u00e2\u20ac\u2122ve even had their documents reviewed for the HAMP or the HARP program. And so you\u00e2\u20ac\u2122ve literally got a servicer who\u00e2\u20ac\u2122s foreclosing on the homeowner with the right hand while they say that they\u00e2\u20ac\u2122re working with the homeowner to try save their home with the left hand.\u00e2\u20ac\u009d<\/p>\n<p><strong>Mainstream issues<br \/>\n<\/strong><br \/>\nWhile the HAMP and HARP programs were originally designed to help subprime borrowers, as the number of people with prime-rate mortgages getting into trouble increases, Quercia is concerned that these kinds of programs will be less effective. <\/p>\n<p>\u00e2\u20ac\u0153The kinds of problems we have to deal with I think are somewhat different,\u00e2\u20ac\u009d he said. \u00e2\u20ac\u0153It\u00e2\u20ac\u2122s not the kind of obvious predatory lending or unlicensed lending. It\u00e2\u20ac\u2122s really more of the mainstream issues all related to the economy.\u00e2\u20ac\u009d<\/p>\n<p>One program available to help unemployed North Carolinians make their mortgage payments is the Home Protection Program being run by the N.C. Housing Finance Agency. The agency makes interest-free bridge loans of up to $24,000 for residents who have lost their jobs in the last two years so they can make their mortgage payments.<\/p>\n<p>\u00e2\u20ac\u0153I wish the program were 10 times bigger than it is,\u00e2\u20ac\u009d Ripley said.<\/p>\n<p>The State Home Foreclosure Prevention Project has a toll-free hotline you can call Monday through Saturday at (866) 234-4857.<\/p>\n<p>To find out more about the Home Protection Program, visit their website at <a href=\"http:\/\/nchfa.com\/Nonprofits\/HPPPhomeprotectionpilot.aspx\">nchfa.com\/Nonprofits\/HPPPhomeprotectionpilot.aspx<br \/>\n<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Rich Fowler Staff Writer Warmer weather may be on the horizon, but don\u00e2\u20ac\u2122t expect that to translate into a hot housing market. Uncertainty about the economy is one reason the market is tepid. Another is that the number of foreclosures continues to be high and new data on the types of filings points to a&#8230;<\/p>\n","protected":false},"author":12,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-8871","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/posts\/8871","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/comments?post=8871"}],"version-history":[{"count":1,"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/posts\/8871\/revisions"}],"predecessor-version":[{"id":8872,"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/posts\/8871\/revisions\/8872"}],"wp:attachment":[{"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/media?parent=8871"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/categories?post=8871"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/tags?post=8871"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}