Number of York County, Pa., Mortgage Foreclosures Rises

The number of residents in York County, Pa., and across the state asking for government help with Pennsylvania mortgage payments increased by about 10 percent last year, according to the York Dispatch.

It’s a “sizable jump” compared to previous years, according to Daryl Rotz, director of the state program known as the Homeowners’ Emergency Mortgage Assistance Program.

The program helps area homeowners catch up on any delinquent Pennsylvania mortgage payments.

In York County, the number of requests increased from 268 in 2005 to 298 last year. The number of requests in mortgage trouble statewide jumped from 9,081 in 2005 to 9,929 last year.

Rotz said the increase is likely tied to the troubles in the subprime [bad credit mortgage] market - loans given to people with a poor credit score - and fewer opportunities for people looking for a mortgage refinance.

“With a lot of people, their debt-to-income ratio is very high, so when there’s hardship, it can really snowball on them,” he said.

“Our job is to try and keep them in their house and help them out until they’re back on their feet and taxpaying citizens again.”

Many a mortgage lender has been hit hard by payment defaults, and investors have been pulling back from the turbulent market.

New Century Financial Corp., the nation’s second-largest provider of home loans to high-risk borrowers, filed for bankruptcy protection last Monday.

Lenders typically want to help homeowners keep their home and get back on their feet here in the Pennsylvania housing market, said Keith Sheffer, vice president of mortgage banking at PeoplesBank.

“Just from a community standpoint, a high rate of foreclosures is going to impact property values,” he said. “If we can help, we want to.”

That’s done through mortgage refinancing, a debt consolidation mortgage and/or by examining home equity.

Sheffer said to date it appears the York County area has escaped the serious problems highlighted in national media accounts, because both lenders and borrowers are more conservative.

Should there be a problem though, he sees it with loans that start out allowing people to pay interest only, but increase significantly after a certain period of time.

When those interest-only mortgage payments increase, and the borrower cannot find somewhere else to refinance, there could be some troubles.

“But this is a pretty conservative area, and I don’t think there’s going to be a high number of” loans like that, he said.

Steve Snell, the executive director for the Realtors Association of York and Adams Counties, agreed this area might not see the effect the larger metropolitan areas will.

He pointed out that although there is trouble with the subprime market, bad credit home loans represent only 10 percent of the overall home loan market nationally.

“And the subprime market, that lending, is not going away,” Snell said. “It’s just tightening. They were getting a little too creative, and therefore risky, so a correction makes sense.”

SOURCE: York Dispatch