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NC Foreclosure Filings Continue Record Climb in 2009; Stronger State and Federal Response Is Needed

Experts at the North Carolina Justice Center are calling for a stronger State and Federal response to the continued increase in foreclosures.  According to records maintained by the North Carolina Administrative Office of the Courts (AOC), foreclosures filings in North Carolina continued to climb rapidly to a new annual high in 2009 of 63,341, an increase of nearly ten thousand over the high in 2008 of 53,960.  Sixty seven of the state’s 100 counties reported an increase in filings.  The highest number reported was in Mecklenburg County with 12,774, up from 8,384 in 2008. Wake, Durham, and New Hanover counties saw increases while Guilford county decreased.

We’re disappointed to see such a dramatic overall increase, said Alfred Ripley; an attorney and Housing and Consumer Advocate with the NC Justice Center.  We had hoped that all the efforts made across the state to reduce foreclosures would have lowered the annual total but clearly there needs to be more done on the State and Federal level to help people avoid foreclosure.

Experts suggest a number of responses to lower the number of foreclosures in the state such as increasing funding to Legal Service providers and Housing counselors that help people avoid foreclosure; and strengthening and expanding the State Home Foreclosure Prevention Program administered by the NC Commissioner of Banks, and the Home Protection Program administered by the NC Housing Finance Agency.

Our state programs have helped thousands of people avoid foreclosure and without them we would be doing even worse; that being said, with these increasing numbers we need to consider ways of improving and expanding these programs, said Ripley.

On the federal level, Justice Center experts contend that two national programs; the Home Affordable Refinance Program (HARP) and Home Affordable Modification Program (HAMP) have been a colossal failure and need dramatic improvements. The HARP program is intended to help homeowners refinance home loans while the HAMP program is designed to help homeowners modify home loans.

We are extremely disappointed in the performance of the HARP and HAMP programs, said Carlene McNulty, an attorney with the NC Justice Center who focuses on defending homeowners against foreclosure.  Time and time again we have seen these programs fail to provide relief to homeowners.  The federal government needs to do much more to help homeowners avoid foreclosure.

McNulty says that the programs failure is due in part to the way they are designed but mainly because mortgage servicers are failing to comply with the requirements of the programs and are not working with homeowners to help them avoid foreclosure.

We see many examples where lenders are going forward with foreclosure sales, when a HAMP modification proposal is on the table. This makes no sense.

Proposed rules promulgated by the NC Commissioner of Banks would prohibit a servicer from going forward with a foreclosure if a loss mitigation request is still being considered.

This additional protection is sorely needed, said McNulty.

Click here for 2009 Foreclosure data by county.

8 Comments

  1. pino

    January 5, 2010 at 12:02 pm

    The HARP program is intended to help homeowners refinance home loans while the HAMP program is designed to help homeowners modify home loans.

    The problem with these foreclosures seem to be that people bought a home they couldn’t afford. It doesn’t seem to be obvious that the solution would be to finaggle a way to keep those home owners in homes they still can’t afford. After all, it was just such finaggling that put those folks in the home to begin with.

    Perhaps letting the home foreclose and sell at its now new value would allow the market to settle back down to the level that is sustainable. Keeping people in these homes only perpetuates the propped up and inflated value of the home.

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  3. Cindy in Orange, MA

    January 5, 2010 at 1:32 pm

    Pino, I did NOT buy a home I couldn’t afford, nor did MANY others.
    I had a FIXED rate. I bought from SHADY, New Century, who LIED to me and indicated that taxes and insurance were included, but then added a RIDER. They refused to give me copies of ANYTHING at the actual closing and instead MAILED me my copy.

    Soon they sold it and I ended up with LITTON LOAN SERVICING.
    Ive been in SEVERAL repayment plans, getting screwed out of even MORE than I owed, by Litton Loans.

    I let them know I wanted to get one of these modifications that I could SEE I definitely qualified for. They modified the payments, temporarily, INCLUDING CHILD SUPPORT I TOLD THEM NOT TO INCLUDE. They finally sent a FINAL MOD, stopped including the child support, it reduced my payment by about 300, but now also included taxes and insurance. They stated there was still an ESCROW SHORTAGE, of 840.00 BUT THEN RIGHT AFTER THEY NOTARIZED IT, THEY STARTED POSTING ESCROW DEFICIENCY, SHORTAGES, AMOUNTING TO LIKE EIGHT GRAND!!!!!!!! Litton Loans is supposedly participating in HAMP PROGRAM? Told me I don’t have a HAMP! They also have JACKED MY PAYMENTS WAY UP AGAIN, MORE THAN THE TRIAL PAYMENTS, because THEY DID NOT DO THE MODIFICATION RIGHT TO BRING ME CURRENT IN THE FIRST PLACE! W
    Wonder why PEOPLE DEFAULT ON THE MODIFIED MORTGAGES, that’s why. Because LITTON LOANS, BANK OF AMERICA, CHASE, they make it AFFORDABLE FOR TWO MONTHS, and then they JACK IT UP on the THIRD MONTH.
    They are a bunch of crooks, getting their palm greased by the US Treasury and NOT HELPING HOMEOWNERS!
    And the Treasury is TURNING A BLIND EYE, telling those with complaints, to complain to NON GOVERNMENT PEOPLE with the HOPE HOTLINE, who can’t even get into the SYSTEM to SEE WHAT THE HELL THE LENDER DID TO THE HOMEOWNER.
    You are going to see a LOT more foreclosures, FOR SURE!

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  6. IBXer

    January 6, 2010 at 10:15 am

    Cindy… so why exactly should the TAXPAYERS pay for you NOT doing your homework when you purchased YOUR home again?

    Just WONDERing…

  7. pino

    January 6, 2010 at 11:08 am

    Looks like even the NY Times agrees with me:

    The Obama administration’s $75 billion program to protect homeowners from foreclosure has been widely pronounced a disappointment, and some economists and real estate experts now contend it has done more harm than good.

    Since President Obama announced the program in February, it has lowered mortgage payments on a trial basis for hundreds of thousands of people but has largely failed to provide permanent relief. Critics increasingly argue that the program, Making Home Affordable, has raised false hopes among people who simply cannot afford their homes.

    As a result, desperate homeowners have sent payments to banks in often-futile efforts to keep their homes, which some see as wasting dollars they could have saved in preparation for moving to cheaper rental residences. Some borrowers have seen their credit tarnished while falsely assuming that loan modifications involved no negative reports to credit agencies.

    Some experts argue the program has impeded economic recovery by delaying a wrenching yet cleansing process through which borrowers give up unaffordable homes and banks fully reckon with their disastrous bets on real estate, enabling money to flow more freely through the financial system.

    “The choice we appear to be making is trying to modify our way out of this, which has the effect of lengthening the crisis,” said Kevin Katari, managing member of Watershed Asset Management, a San Francisco-based hedge fund. “We have simply slowed the foreclosure pipeline, with people staying in houses they are ultimately not going to be able to afford anyway.

  8. paula

    January 23, 2010 at 6:13 am

    The problem is the corrupt attorney/trustee and clerks involved. after several attempts of trying to get the reinstatement fee amount with no success I recieved notice that collections activity had been stopped and i would recieve a trial mod. I made the payment the day I recieved it (45 days before due)and set up the following two payments to be automatically deducted. A few days after the payment had cleared my account, the trustee filed for the hearing prior to sale. I contact the attorneys office and they tell me they will take care of it. I say make sure I get a dismissal notice because I will wory about it. They say well, you can just call me back to find out, because we cant do anything. I guess they thought they had lulled me into a sense of stupidity because when I showed up for the hearing, they were highly agitated. I think they were planning to move forward and I swhowed up with proof that I paid prior to filing. the trustee said they were filing a continuance and I said no dismiss, you filed after collections were to be stopped heres my check copy cleared prior to you filing. theattorney says well I didnt bring your file to verify details. the clerk says well, I am the judge and I am granting the order to continue, and he hands it to me so he and the attorney must have decided this plan of action while I was waiting to be called back since it was already prepared. The attorney also said that I could not get the reinstatement because they were requiring the entire loan…. right…. they wont allow me to pay the balance due and normal payments but will allow me to pay no past due and lower payments. heres the deal. I have 50% equity. they keep me thinking I am getting a reinstatement amount so I think its under control then they give me the run around until they can get it into court. they tell some more lies to make you think its all good and while you are in your peaceful stupor thinking you have done everything you need to do, they snatch your house. you might not even know it happened until after the sale and grace period. loan modifications are dangerous because when you get the trial, you assume that if you do everything required, they will give you the permanant mod. plus, thats what they tell you and the point of the trial right? wrong. the point is to get you into a vulnerable position. that way, by the time you find out you did not get the final modification, its unlikely that you have prepared to pay the huge past due that has accumulated and all of the attorneys fees as well as the higher payment and you have no time left to get it together. they take the house and make a nice profit. of course this only works if you have equity. i think these hearings should be on tape to protect the homeowner since they are done privately in a back room.. i dont know why the clerk lied and said he was a judge, but i believe this should have been dismissed. the burden of proof was on the trustee, he filed the hearing. i provided proof of payment and i cant help it if the trustee did not bring his file thats his responsibility. (he lied about that anyway because the clerk said the order was filed on the 23rd,but that was my trial mod and he would not have seen that without the trustee file) furthermore, every time i tried to answer a question or make a statement the trustee/attorney and clerk would block me. very oppressive, but certainly enlightening. thank god I did not listen to the trustee/attorneys office and not worry about the court hearing. I do wonder why that clerk told me he was the judge, but atleast I know they have no intention of giving me the permanant modification and time to work around them. I understand that lots of people have not been that lucky..