What’s going on in the U.S.? All over the country there is an epidemic of foreclosures and to make bad matters worse, houses are not selling. If someone sees themselves headed for foreclosure, they cannot even pull out by selling their home because it’s not a seller’s market right now.
I live in a quaint little town. About three years ago the economy was on fire. My town was listed in the Washingtonian Best Places to Live issue a couple years in a row. As a result, for a while it was almost impossible to purchase a home in my town because there were bidding wars going on like crazy.
I’ll never forget a woman knocking on my door and asking me if I would be willing to sell my home to her. I laughed and told her, “no way”. That was only three years ago. My, how times have drastically changed. Across the street from me a home was bought by a “flipper” who wanted to fix it up and sell it for profit. The home is beautiful. The work done on it is impeccable. The purchaser even brought in a “staging” company to fix it up with lovely curtains and interior decorating services.
In spite of all of his efforts, that house has been sitting there, unsold for 4 months at least. This does not look good, everyone. Even in wealthy Montgomery County, Maryland (one of the richest counties in America)the houses are not selling and many are going into foreclosure:
The number of foreclosure filings in Montgomery County spiked 2,000 percent in the third quarter of this year compared with the same time last year, proving that even a county with the seventh-highest median household income in the nation is not immune to the fallout from the escalating subprime lending crisis.
The county reported 1,009 foreclosure filings — default notices, auction sale notices and bank repossessions — between July and September of this year, 20 times more than the 48 filings made during those same months last year, according to national data provider RealtyTrac.
In every jurisdiction, even the wealthier ones like Montgomery and Fairfax, there are relatively affordable older housing projects that attracted people who in todays market couldn’t afford them, said Stephen Fuller, head of the George Mason Center for Regional Analysis.
People who didn’t qualify for [prime loans] could get into the houses using subprime loans or other mechanisms, he added.
Fuller said subprime borrowers were probably also attracted to the spate of condo projects in Silver Spring and Bethesda during the housing boom.
Lenders offered a record number of subprime loans to borrowers in the D.C. metro area in 2005 and 2006, according to the Center for Responsible Lending.
Such loans often come with low initial interest rates that jump drastically after two or three years, at which point many homeowners find themselves unable to afford their mortgages, triggering foreclosure.
Yes, everybody a few years ago was qualifying for a home, regardless of credit rating or salary. Such people were tricked into getting into a home they could not afford in an area they could not afford and now they are feeling the effects of that horrible decision. I blame much of it on lenders and shady real estate agents who engaged people in those shady deals. The world is in trouble, folks. We are spending TRILLIONS on war while our economy is falling apart at the seams.
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