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Foreclosures Up by 33 Percent in Some Central Virginia Counties

About 211 local property owners in Central Virginia counties of Appomattox, Amherst, Bedford and Campbell lost their homes to foreclosure between January and August 2008, up by 33 percent from the 159 properties reported for the same period a year ago.

The number of forfeited properties nearly doubled in the county of Bedford, from 42 homes to 82. This includes the expensive properties in Forest and Smith Mountain Lake.

In Lynchburg, 200 homeowners suffered the same fate when they failed to pay their monthly mortgage payments. The number of vacant properties in the city grew to 39 percent or 21 properties, mostly in low-income communities.

One of the factors attributed to the increasing housing crisis in Lynchburg is subprime lending. Subprime loans are given to borrowers who have questionable credit background or no income documentation. Lenders charged higher interest rates on subprime loans because of the risks involved.

However, mortgage originator Billy Woolridge believed that subprime loan was not a factor in the increased of foreclosures in Lynchburg. He added that there was no low-income population in the city that would need subprime loans.

Meanwhile, out of the 211 foreclosed properties in Lynchburg, 36 had undergone interest rate adjustments, with 17 homeowners taking their first adjustment a little after a year before forfeiture.

According to Clark Jefferson, a Lynchburg Community Action Group housing counselor, homeowners facing the threat of losing their homes come from various sectors in the community.

The U.S. Census data showed five foreclosure filings on Early Street, an area in Lynchburg’s Daniel Hills neighborhood where the median income per household is $22,000. In the Forest neighborhood in Bedford County, an area known for its expensive properties, 18 foreclosure filings have been reported in 2008.

Research firm RealtyTrac estimated that foreclosure filings in the U.S. increased by 50 percent for 2008, while 2007 registered 75 percent increased in filings than in 2006.

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