NC foreclosure filings grew by 17 percent in 2009 due to unemployment, anemic home prices

NC foreclosure filings up by 17 percent in 2009

RALEIGH, N.C. — The increase in the number of North Carolina homeowners on the verge of losing their homes by foreclosure more than doubled in 2009 compared to the year before, according to state court records.

Foreclosure filings in the state’s courts rose by 17.4 percent from 53,960 at the end of 2008 to 63,341 through last week, the Administrative Office of the Courts said. The 2008 total was 8.6 percent higher compared to 2007, according to the data.

Unemployment above 10 percent and stable or slightly falling home prices — making it difficult for owners to recoup enough from sales to pay off their mortgages — contributed to the increase in filings, deputy state banking commissioner Mark Pearce said.

“The best predictor of foreclosure and defaults is how much people owe on their property compared to what it’s worth,” Pearce said.

A filing only means the foreclosure process began, so a deal may have been worked out to avoid a home seizure. The court filings are the best data the state has to monitor foreclosure trends.

Two-thirds of the state’s counties saw an increase in filings. Many of the largest increases centered on Charlotte, which has seen banking sector job losses. Mecklenburg County recorded 12,774 last year, a 54 percent increase. Coastal Brunswick County, where vacation homes are more plentiful, saw an 82 percent increase.

National data show that North Carolina’s foreclosure rate remains low compared to the national average. RealtyTrac, which compiles housing data for most U.S. counties, said 1 in 180 homes in North Carolina, or 22,887, were in the foreclosure process as of November, compared to 1 in 65 nationwide.

A commission initiative approved by the Legislature has helped more than 2,500 residents avoid home foreclosure by counseling homeowners and working with mortgage servicers to create a new payment plans.

Pearce said he expects an even higher number of foreclosure filings in 2010 as the state’s economy remains sour.

The banking commission is currently hammering out rules designed to reduce foreclosures further, such as one requiring a servicer to stop the foreclosure process while it considers a homeowner’s request for help.

“We’re disappointed to see such a dramatic overall increase,” said Al Ripley, a housing attorney with the North Carolina Justice Center, which advocates for the poor. “Clearly there needs to be more done on the state and federal level to help people avoid foreclosure.”