Foreclosures On The Rise In Towns

Posted in Foreclosure, October 1st, 2007 |

According to surveys foreclosure notices have been served to 100 properties in Greenwich this year – 35% more than 2006. The situation is worse in Stamford with 226 foreclosures this year marking a 73% jump from the previous year. Norwalk registers a 75% leap with 255 foreclosures. It shows that even strong housing market centers like Greenwich and lower Fairfield County are buckling under. According to figures released by the Superior Court of the state, the virus is spreading across the state with figures speaking of an all time 16 year high.

There has been a lot of foreclosure activity in this region but numbers are often misleading. Foreclosure is a time consuming process. It is sometimes averted when the borrower manages to pay off the dues before the auction hammer falls. The residents of the area are fairly well off and a stumble here and there does not necessarily mean a fall. The real estate market is fairly stable and can be used as leverage in negotiations. The borrower may keep the house or sell it on satisfactory terms and thus preventing it from going into foreclosure. In fact most of the properties initially listed as foreclosure never reach the final stage because those who are interested realize half way that there is more to be gained by negotiations than otherwise.

It was quite different during the 1980’s. But that cannot dim the reality of the present as can be seen by the drama being regularly played out at Stamford Superior Court. Every week there are foreclosure hearings. In fact there has been a sharp increase lately. According to figures released by the court the numbers have gone up by 70% since the last two years.

Observers in the industry do not want to make too much out of this foreclosures increase because according to their analysis it just scratches the surface of the mortgage industry as a whole. The most vulnerable are the sub-prime mortgages but these comprise of only 8% of the total loans that have been taken in this region.

However it is apparent that lenders have become very conservative and shying away from risky loans. Previously the money loaned out was often more than the actual value of the property mortgaged or the income of the borrower was not strictly scrutinized or taken into account. But those days are over.