Local lenders avoid subprime disaster

Kansas Foreclosure & Real Estate News

By Carol Bronson

Lenders have filed foreclosure proceedings in Pratt County District Court for nine homes during 2007. While that is unfortunate at best, and a major setback for the individuals and families involved, it doesn't echo the sharp increase in defaulted mortgages experienced elsewhere in the state and nation. Eleven foreclosures were filed in 2006.

Local banks have not offered the type of mortgages being blamed for a 5.3 percent increase in Kansas foreclosures from July 2006 to July 2007 and a 93 percent increase nationwide. California has seen a nearly three-fold increase in foreclosures, according to Ashley Anstaett, with the Kansas Attorney General's office.

Officers at The Peoples Bank, First National Bank in Pratt and First State Bank all said in September that they did not offer the subprime mortgages that have made it possible for people with a history of credit problems or lower incomes to borrow money they now have difficulty repaying.

Adjustable rate loans may have been made at 3 percent interest, but have climbed to 10 or 12 percent, adding hundreds of dollars to monthly payments. Other costs, like gasoline, have also increased, pushing consumers' budgets to the limit, Anstaett said.

Some have complained to the Attorney General's office, she said, but in most cases, lenders were found to be operating according to acceptable business practices.

Attorney General Paul Morrison has convened a task force to investigate the problem and develop recommendations to stem the tide of home foreclosure.

The most important advice for anyone facing foreclosure is to contact your lender or the company who sends your bill as soon as possible. The task force recommends that borrowers whose interest rate is creeping up try to refinance with a fixed rate before payments become unmanageable or try to negotiate for a lower payment, Anstaett said.

Consumers facing foreclosure are advised to obtain legal advice immediately and never sign anything without having it reviewed by their attorney.

Consumers can also consult a housing counseling agency, which can offer guidance on busying, renting, reverse mortgages and default and foreclosure prevention. The Department of Housing and Urban Development maintains a list of approved agencies at www.hud.gov.

If you absolutely cannot afford to keep making mortgage payments, check all options before walking away from your home. You may be able to sell the home or negotiate with your lender to avoid losing any equity or tarnishing your credit record.

 

 

 

For more information on Kansas foreclosure rates or subprime lending news, please return to the a Kansas Foreclosure homepage.

Article Source http://www.pratttribune.com/articles/2007/11/29/news/01.txt