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Financial Flash Newsletter

Foreclosure Update: Crisis to Extend Two More Years

As the economy slowly recovers, the foreclosure crisis continues to affect millions of Americans and is projected to continue for another two years.

“The foreclosure crisis is bad and we predict that it will get worse before it gets better due to continuing resets of adjustable rate mortgages and foreclosures due to unemployment,” commented Peter Skillern, Executive Director of the Community Reinvestment Association of North Carolina, a statewide organization whose mission is to promote and protect community wealth by advocating for change in the lending practices of financial institutions.

According to research by the Community Reinvestment Association of NC, two and three year arms that were initiated in 2006 will drive the upcoming foreclosure rate increase. These adjusting loans, in tandem with a 10.8% statewide unemployment rate, jeopardize our community's ability to recover from the economic downturn.

Fast Facts about the Foreclosure Crisis

Nationwide

  • Nearly 1 in 5 homeowners owe more on their property than it is worth
  • Nearly 1 in 10 homeowners are late on their mortgage

North Carolina

  • Projected new foreclosures in 2009: 46,600
  • Projected homes lost through foreclosures over next four years: 155,000

According to data collected from the Center for Responsible Lending (www.responsiblelending.org).

Western North Carolina - Increase in foreclosures versus 2008

  • Buncombe County - 39% YTD increase
  • Henderson County - 38% YTD increase
  • Haywood County - 44% YTD increase
  • Madison County - 39% YTD increase
  • Macon County - 66% YTD increase

According to data collected by the North Carolina Commissioner of Banks (www.ncforeclosurehelp.org)

OnTrack's Local Impact

OnTrack has been working hard to address the foreclosure crisis for homeowners in Western North Carolina and has had significant success in helping homeowners avoid foreclosure.

  • In 2008, OnTrack counseled over 511 foreclosure prevention cases, helping 99% avoid foreclosure.
  • Already in the first three quarters of 2009, OnTrack counseled over 634 foreclosure prevention cases and a 98% success rate!
  • Of these cases, 383 were in Buncombe County, 131 in Henderson County, 66 in Haywood County, and the remaining throughout Western North Carolina.

"The dramatic changes in loss mitigation practices along with the erratic shifts in our economy have combined to create a highly unpredictable environment in which we serve our clients," commented Celeste Collins, OnTrack Executive Director. "Our housing counseling staff's high level of expertise, commitment to positive client resolution, and adaptive leadership have contributed to our strong success rate with foreclosure prevention cases."

Thanks to funding by local donors, United Way, the NC Commissioner of Banks, NeigborWorks America, the Community Foundation Recession Response Fund, the Mission Foundation, and the North Carolina Housing Finance Agency, all of these cases were provided to clients at no cost.

"As soon as someone thinks they may be in danger of becoming late on their mortgage, they should call us, especially since the crisis has caused an extended wait time for appointments. Often there is a direct link between the amount of time a loan is in delinquency and our ability to help the client create an affordable workout plan," commented Tom Luzon, OnTrack Director of Counseling Services. "We encourage homeowners to take action quickly if they see potential danger lurking on the horizon."

Foreclosure Prevention appointments can be scheduled by calling OnTrack at 828-255-5166 or 1-800-737-5485. Click here to learn more about OnTrack's foreclosure prevention program.

United Way NFCC Council on Accreditation