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Dc suburb home prices up as foreclosures soar { October 2007 } Original Source Link: (May no longer be active)
http://www.examiner.com/a-1072665~Foreclosure_filings_up_2_000_percent__experts_say_financial_future_to_worsen.htmlhttp://www.examiner.com/a-1072665~Foreclosure_filings_up_2_000_percent__experts_say_financial_future_to_worsen.html
Foreclosures up 2,000%; crisis grows
Filed under: WASHINGTON , Taryn Luntz , FORECLOSURES
Nov 28, 2007 3:00 AM (2 days ago) by Taryn Luntz, The Examiner
WASHINGTON (Map, News) - 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 today’s 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.
Foreclosure numbers have grown progressively worse in the county each quarter of 2007, and although they are still only affecting about 0.3 percent of households, experts say the worst is yet to come: The interest rates for many of the 115,000 subprime loans made to D.C.-area borrowers in 2005 and 2006 are due to reset upward in the coming year.
While rising foreclosure rates tend to drive down the housing values of surrounding homes and even entire neighborhoods, Montgomery County so far has not seen a strong effect.
Figures from the Greater Capital Area Association of Realtors show that, as of October, the median price for a single-family home in the county has risen 4.1 percent over the past year.
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