More Families Affected by Foreclosures

Defaults Among Highest in Region

More than twice as many homes in the Prince William County area fell into foreclosure last month than in February 2007, a sign that local real estate woes are worsening.

According to the land records office of the Prince William County Circuit Court, which tracks foreclosure filings for the county as well as Manassas and Manassas Park, 306 properties were repossessed by banks last month, up from 140 a year earlier. Foreclosures in the three jurisdictions rose 89 percent during the first two months of this year compared with the corresponding period last year.

The news comes as the area is undergoing a soaring increase in the number of mortgages going into default. In 2007, the land records office processed 3,344 foreclosures; 282 were recorded in 2006 and 52 in 2005.

"We still have a large default rate," said Carolyn Capalbo, a Manassas area real estate agent specializing in foreclosure sales. "I'm not seeing a slowdown."

Prince William had the highest default rate in Northern Virginia last month, with 5.5 percent of all housing in some stage of foreclosure, according to a study by George Mason University's Center for Regional Analysis. Loudoun County was second, with 2.8 percent.

The rate last year for the Washington metro region was 1.7 percent from October to December, the study found.

One reason for the high foreclosure rate in the Prince William area appears to be that a large portion of the area's Hispanic immigrant families are losing their homes, real estate agents say.

Real estate experts say several factors are to blame for driving up foreclosures: Unscrupulous lending practices, fewer construction jobs and the county's new anti-illegal-immigration policies have all played a role.

The trend is likely to continue as interest rates on adjustable mortgages go up when they reset, Capalbo said. "They adjust at the anniversary when people purchased their homes," she said, noting that spring and summer are typically busier for housing sales and therefore, possibly for foreclosure activity.

Local government finances could face serious trouble if property taxes go unpaid. So far, that hasn't happened, said Prince William County's director of finance, Chris Martino.

"We're still collecting 99 percent of our tax levy," he said.

Prince William Board of County Supervisors Chairman Corey A. Stewart (R-At Large) said he viewed the steep downturn as a short-term problem, part of a boom-and-bust cycle. While the bust might be the most severe in recent memory, Stewart said, there's a "silver lining" in the dark foreclosure cloud.

"Frankly, it gives us a little bit of a break in terms of housing construction by relieving some of the pressure on our infrastructure," he said. "And to the extent that affordable housing was an issue in the county, that has certainly been addressed. . . . I think this is a market correction."