Credit counseling service feels foreclosure spike
As mortgage foreclosures increase nationally, the Northeast has not been as hard hit as other parts of the country, but the region, and New Hampshire, are far from immune, according to the Consumer Credit Counseling Services of NH-VT.
The service, a nonprofit credit counseling and education organization, reports that requests for housing-related financial counseling has doubled in the past 12 months.
Since July of 2006, CCCS NH-VT has completed over 250 housing counseling sessions — . That’s a 31% increase over the same period last year. During the last six months CCCS NH-VT also has worked directly with about 125 families facing imminent threat of foreclosure.
“We’re seeing a significant increase in families that are unable to keep up with payments on their subprime mortgages” said Kerry York, executive director of CCCS NH-VT.
After a year or two of low interest rates on an adjustable rate mortgage, many are now reeling from higher interest rates as their mortgages re-set, she said.
“Recently, we met with a family trying to deal with a rate increase on their ARM. The rate change increased their monthly mortgage payment from $1,300 to $1,750.” York added, “Most people don’t have that kind of wiggle room in their family budget.”
York also has another concern as well: “We’re now seeing a scaling back of mortgage products and a tightening of loan approval standards. Many people who may have been told that they could refinance if rates went up now might not have that option available to them.”
She said that, since many subprime mortgages were made in late 2005 and 2006, “we’ll be seeing the fallout from this through 2008 and perhaps into 2009. This is a problem that’s not going to go away quickly.” – JEFF FEINGOLD