RALEIGH (January 5, 2010) -- Experts at the North Carolina Justice Center are calling for a stronger state and federal response to the continued increase in foreclosures. According to records maintained by the North Carolina Administrative Office of the Courts (AOC), foreclosures filings in North Carolina continued to climb rapidly to a new annual high in 2009 of 63,341, an increase of nearly 10,000 over the high in 2008 of 53,960. Sixty-seven of the state's 100 counties reported an increase in filings. The highest number reported was in Mecklenburg County with 12,774, up from 8,384 in 2008. Wake, Durham, and New Hanover counties saw increases, while the number of filings in Guilford County decreased.
"We're disappointed to see such a dramatic overall increase," said Alfred Ripley, an attorney and housing and consumer advocate with the NC Justice Center. "We had hoped that all the efforts made across the state to reduce foreclosures would have lowered the annual total, but clearly there needs to be more done on the state and federal levels to help people avoid foreclosure."
Experts suggest a number of responses to lower the number of foreclosures in the state, such as increasing funding to Legal Service providers and housing counselors that help people avoid foreclosure. In addition, the state could strengthen and expand the State Home Foreclosure Prevention Program, administered by the NC Commissioner of Banks, and the Home Protection Program, administered by the NC Housing Finance Agency. "Our state programs have helped thousands of people avoid foreclosure, and without them we would be doing even worse. That being said, with these increasing numbers we need to consider ways of improving and expanding these programs," said Ripley.
On the federal level, Justice Center experts contend that two national programs, the Home Affordable Refinance Program (HARP) and Home Affordable Modification Program (HAMP), have been colossal failures and need dramatic improvements. The HARP program is intended to help homeowners refinance home loans while the HAMP program is designed to help homeowners modify home loans.
"We are extremely disappointed in the performance of the HARP and HAMP programs," said Carlene McNulty, an attorney with the NC Justice Center who focuses on defending homeowners against foreclosure. "Time and time again we have seen these programs fail to provide relief to homeowners. The federal government needs to do much more to help homeowners avoid foreclosure."
McNulty says that the programs' failures are due in part to the way they are designed, but the main problem is that mortgage servicers are failing to comply with the requirements of the programs and are not working with homeowners to help them avoid foreclosure. "We see many examples of lenders going forward with foreclosure sales even when a HAMP modification proposal is on the table," she added. "This makes no sense." Proposed rules promulgated by the NC Commissioner of Banks would prohibit a servicer from going forward with a foreclosure if a loss mitigation request is still being considered. "This additional protection is sorely needed," said McNulty.