Local Home Foreclosures on the Rise
Monday, December 10, 2007
Caprise Coppedge, a housing counselor in Prince George's County, used to work with maybe one person a week who was struggling to make a mortgage payment.
Now, she sees at least three of them a day and turns many more away.
"There's been a shockingly sharp increase of people in need of help in the past six months," said Coppedge, who works at United Communities Against Poverty in Capitol Heights. "It's unreal."
The Washington region, once considered immune to the unfolding mortgage crisis, has experienced a surge of loans gone bad in recent months. It's an alarming sign that even an economy with plenty of well-paid government contracting jobs could not avoid the credit crunch that's plagued more-troubled regions of the country.
Rapidly deteriorating conditions in the area and beyond prompted the Bush administration to propose a plan last week to temporarily freeze interest rates for some at-risk borrowers, an approach skeptics say will not help nearly enough people to make a difference to the economy or, on a smaller scale, to the most troubled areas.
Locally, those areas include Prince George's County neighborhoods popular with first-time home buyers and outlying Northern Virginia suburbs with hundreds of newly built homes that attracted speculators. There were 79 foreclosures for every 10,000 Washington area households in the third quarter, not including renters -- up from 11 a year ago, according to George Mason University's Center for Regional Analysis.
Coppedge saw it coming in slow motion. Around this time last year, she was mostly dealing with renters who were behind on payments. Rarely did she counsel at-risk homeowners. When she did, they were usually suffering a one-time setback such as job loss.
"Then in midsummer, we felt the tide turning," Coppedge said. "People started trickling in. First they came in to express concern about their loans and gathered information. Then by September, everything picked up speed and suddenly people were telling us they were behind on their mortgages."
Many of those people had taken out adjustable-rate loans. Some used them to buy homes they otherwise could not afford when prices soared in 2005 and 2006. Others were constantly refinancing to pull cash out of their homes.
These loans were usually subprime mortgages, typically made to people with blemished credit. But they were in no way limited to low-income borrowers, said Coppedge, whose recent clients typically earn $60,000 to $110,000 a year.
"People from all walks are getting hit by this," Coppedge said.
Leonid Frolov may soon join their ranks. Frolov, a translator for a commercial satellite company, used what is called a piggyback mortgage to buy his first home, a small D.C. condominium, three years ago.