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MILITARY AND VETERANS AMONG THOSE HIT WITH HOME
FORECLOSURES -- Experts have blamed a surge in
foreclosures on mortgages that have expensive
fees and adjustable interest rates.
Story here...
http://www.wilmingtonstar.com/
apps/pbcs.dll/article?AID=/20
070501/APN/705010567
Story below:
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Military families among those hit with home
foreclosures
The Associated Press
FAYETTEVILLE, N.C. | The number of defaulted
home mortgages in the state has risen sharply in recent years, and about
a third of foreclosure auctions in the Fayetteville area have involved
active-duty military families or veterans.
An investigation by The Fayetteville Observer covering 2001 to 2005
showed that 1,770 out of 4,979 foreclosure auctions in Cumberland County
involved loans guaranteed by the U.S. Department of Veterans Affairs. In
those cases, borrowers were active-duty military families or retired
veterans.
Experts have blamed a surge in foreclosures across the state on
mortgages that have expensive fees and adjustable interest rates.
Companies give loans to families regardless of credit or income, but the
lenders can sometimes charge thousands of dollars in fees if borrowers
fall behind.
"The problem is you have these mortgage companies, these lien-holders,
that are absolutely aggressive," said Johnnie Larrie, the senior
managing attorney with Legal Aid of Cumberland County, which represents
low-income families.
"And they certainly don't distinguish between if you are military or
not. There is money to be made in the foreclosure business."
Fort Bragg's Financial Readiness Program has helped some soldiers, most
of whom are only a few months behind on payments and might be able to
get emergency loans, said program manager Lynn Olavarria.
But not many soldiers in dire trouble seek help from the program,
perhaps because they feel self-conscious about their financial
situations. Severe cases of debt and foreclosures can cost soldiers
their security clearance.
"Unfortunately, there are folks out there who dont bother stopping in,"
Olavarria said.
According to the newspaper's analysis, foreclosure auctions in the
county featured between about 800 and 1,200 homes each year between 2001
and 2005. The property was worth more than $316.6 million.
Of the nearly 5,000 home foreclosures, almost half were bought or
refinanced less than four years before, meaning many homeowners likely
signed loans they couldn't afford or loans with adjustable interest
rates.
The number of people losing homes could get even bigger, as industry
observers have said higher payments will kick in and result in up to $3
trillion in adjustable mortgages nationwide within the next two years.
In North Carolina, about 45,000 foreclosures were filed against
homeowners last year - a 6 percent increase from the year before. The
number of cases has shot up nearly 174 percent since 1998.
State lawmakers held hearings on the surge in foreclosures last spring,
but no laws targeting predatory lending and helping homeowners defend
themselves have materialized from the discussions.
Government officials across the country have targeted such lenders,
including Atlanta-based Beazer Homes USA Inc. The company has turned
over documents to the Securities and Exchange Commission as a part of a
federal investigation of possible fraud.
Some Charlotte-area home buyers have said the builder offered them money
to give the company high marks in a survey, which could have resulted in
bonuses for company executives.
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Larry Scott --
