Virginia Foreclosure springs up!
According to The daily progress, the number of forclosures in the Charlottesville region has skyrocketed drastically maintaining the same trend as Virginia and nation. It has become an increasingly common scenario in Central Virginia to auction foreclosed property. And on Tuesday, a couple lost their 1200 sq. ft home in a forclosure property auction which was worth around $135,000 for having missed their mortgage payments.
And according to a loan officer and chief executive of one of the top mortgage services in Charlottesville, the problem of foreclosures in Virginia projects a difficult situation for people and may still get worse. Within the first three months of this year, around 128 notices were served which is nothing less than 27 percent rise over the same time during the year 2007.
There has been a growing trend of number of families who have missed paying their payments. The substantial increase is from two per week during early 2007 to around three per day this year. The increasing trend of Virginia foreclosures has almost caused nightmare among the residents of the state. And it involves people from all levels of income and not just the low-income groups!
According to the director of a program towards Regional Homeownership Center, there has been tremendous increase in the number of defaulters with initiated foreclosures that it is almost impossible to handle all of them! And many such centers are established to cope up with the growing workload faced by many housing counselors.
According to experts at ForeclosureConnections, Virginia foreclosure increased by 137 percent during the year 2008 when compared to 2007 same time. And a non-profit agency estimates around 10,000 families homeless by the end of this year!
A closer look at the Virginia forclosure activity reveals the underlying reason of subprime lending allowing borrowers with large credit scores in order to buy homes at a higher cost. Gradually, with the explosion of subprime lending business, the companies started to relax their norms and determine the eligibility for borrowers. This gave in to a situation where even those who wouldn’t have otherwise qualified were allowed loans for purchasing home.
There are many people who been given loans to purchase home which otherwise shouldn’t have been given. And there are whole groups of sharks waiting to prey on these kinds of people. Most of the home owners that are now in trouble set their property purchase finance through an adjustable mortgage rate that has reset itself under higher rates since then.
For the last couple of years, the rate of adjustable mortgage rates has increased drastically from one percent to a little above five percent. This has resulted in drastic increase in the monthly mortgage payments for many owning homes through adjustable mortgage rates. The rise in the Virginia home foreclosures has posed a threat to other states of the nation.
According to a research director at Weldon Cooper Center, Virginia University, an overall national threat in housing market is getting brewed with the rise in forclosures and it’s aggregated figure across the country, which would determine if there would be an experience of recession. According to Murphy, the main expense on their list is the mortgage and hence people must first pay off their housing costs and the rest later!
