Fairfax County Counts On Foreclosures Take Five Leaps
In Fairfax County foreclosure figures rose by five times more during the first six months of 2007 in comparison to the same time last year. In the first half of 2006 the number of foreclosure listings was 190 but it zoomed to 987 during the same period this year. The County has released these figures.
The problem is growing as more and more house owners are neither able to meet their mortgage dues nor sell their property in a falling real estate market. Ira Rheingold, executive director of the National Association of Consumer Advocates wonders how Fairfax can remain unaffected and immune from the virus that has gripped the entire country.
The blame is being laid at the door of lenders who did a conjurer’s trick in qualifying borrowers to avail of adjustable-rate mortgages. It was inevitable that within a short period hiccups would start.
The borrowers began to stumble in their payment schedule. The situation became impossible when a falling market caused property equity to fall.
Under the circumstances the property would not be able to fetch a price that would meet debts and yet leave something over and above for a honourable future route of existence. Rheingold is unhappy with the banks for allowing lending practices to spin out of control and cause this sort of a crisis.
Deputy Fair fax Executive, Ed Long predicts that there is no hope of the waves subsiding before 2008. The mortgage industry has just started to clean up their backyard. However it is well to note that of the 233,000 residential units in Fairfax County, the foreclosed units comprise of only a fraction.
Rheingold went on to explain that the problem has at its root the problem of the great American dream of owning a house and the dichotomy of not being able to qualify for a loan in the traditional conservative manner.
This led to the creation of the sub-prime market that readily advanced loans without much digging into loan creditworthiness of the borrower.
Unfortunately sub-prime lenders became overzealous and predatory. The gullible were talked into loans that were doomed to failure from the start. The price of property was falsely inflated.
Together with this, decline on the economic front coupled with personal woes led to the inevitable. The seed was sown. Now there is no other way but to reap the harvest.
