Delaware Foreclosures Continue To Rise

Posted in Foreclosures, November 19th, 2007 |

In October the foreclosure listings in Delaware rose by 53% as compared to October 2006. Kent County showed 43 listings – an increase of 30% from 2006. New Castle County recorded 211 listings – an increase of 51%. Sussex County broke a record by rising by 80% since 2006 with 72 listings this year.

The Deputy Bank Commissioner for Consumer Affairs opines that this trend of 50% increase will continue over the following months and will reach its peak in April and Amy 2008.

The Foreclosure is a legal step initiated by the lender when the borrower becomes delinquent on payments and courts default. It does not always mean eviction. The sub-prime mortgage market is held responsible for this crisis. Teaser loans tempted borrowers into mortgages for which they were not qualified. Within a year or so the rates rose and the borrowers found it impossible to pull along with the mortgage. So they fell back in payments leading to default and delinquency. When this happens the lender sends a notice of foreclosure. A date is set for hearing in the court. If the court is satisfied that the lender is on the right side of the fence then an auction notice is issued. The sale proceeds are used to clear all dues – mortgage, taxes etc. About 46% of the foreclosure filings end in the loss of the house. This is as per study reports released by the Office of the State Bank Commissioner. Borrowers who try to seek help at the initial stages often find a way out with the help of counselors. Delay in this matter spells doom.
With foreclosures running into millions Wall Street is being forced to sit up. Lenders are seeing the logic in working with the borrowers and not against them to their own interests. Compared to the previous years lenders are being more cooperative.

A real estate businessman, Dustin Oldfather in Sussex County says that although foreclosures have reached a record high, it has not adversely affected business. Foreclosures are not dominating the conversation as yet. There has been a fall in the condo market but it is business as usual for single-family as well as vacation houses.

The state has set up a task force like other counties. It will meet on Tuesday in the following week to discuss the alarming rise in foreclosures in Delaware.