Nationwide foreclosure rates increased 25-percent last year, with Tennessee ranking among the top ten in states with over 1-percent of homeowners losing their homes.
RealTrac, a California company that tracks foreclosures, says there were more than 24-thousand in Tennessee in 2005.
RealTrac estimates most of the foreclosures nationwide stem from adjustable rate mortgages, where the rate goes up faster than a person’s income.
But Cathie Dodd, president of the Woodbine Community Organization – a Nashville non-profit that offers credit and foreclosure counseling- says another problem is that home buyers no longer have to pay closing costs up front.
“With the mortgage products out there right now, what I’m seeing is a lot of folks are totally bypassing any education, and I’m not talking just low-income people, I’m talking people in general and they roll the closing costs into your loan and you have 100 and three percent of your house mortgaged when you walk into your house and therefore from day one, you’re upside down in your house.”
Dodd stresses that mortgage education is the most important tool in combating foreclosures. She estimates she’ll have double the number of people in foreclosure counseling this year.
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