South Carolina Mortgage Foreclosures Among Nation’s Lowest

The South Carolina housing market continued to buck national trends around Anderson, so it was no surprise to some lenders that they aren’t seeing the huge increases in foreclosures making headlines in national media.

More than 437,000 foreclosures were filed nationwide in the first quarter, up 27 percent from the pervious quarter, as well as 35 percent from the same period in 2006, according to RealtyTrac.

South Carolina saw 1,091 foreclosure cases, one for every 1,606 households. But the number of foreclosures was down 57.25 percent from this time last year and gave South Carolina one of the lowest rates in the U.S.

RealtyTrac ranked the state No. 41 of 50.

Areas with high unemployment tend to be a lot higher in South Carolina mortgage foreclosures, but the number of foreclosures has increased in the nation despite a dropping unemployment rate.

“Exotic” or non-traditional home loans in areas with booming housing markets are playing a large part in the increase, said Daren Blomquist, RealtyTrac spokesman.

Delinquency rates were up mostly from borrowers with poor credit who struggled to keep up with bad credit mortgage loan products.

But those with good credit also struggled, particularly those who took out adjustable-rate mortgages or those with fluctuating interest rates.

As mortgage rates increase, many people who had banked on appreciation to cover the added expense are finding themselves stuck in houses they can’t afford.

“In general, a lot of people in a lot of areas have gotten over their heads and have a house they can’t afford,” Mr. Blomquist said.

“People are making money, but they can’t afford their homes,” he added.

Meanwhile, Anderson County’s housing market never saw the double-digit increases in home prices experienced by larger markets - like California and Florida - and therefore aren’t seeing those kind of large-scale woes.

Anderson County has seen a slight increase in the number of foreclosures — the Master in Equity Office reported 765 foreclosures in 2005, 864 in 2006 and 277 so far this year — but nothing on the scale of what’s happening in other parts of the country.

The reasons for foreclosures in Anderson County are the same typical causes of foreclosures for decades: death, divorce and unemployment. RealtyTrac even listed Greenville as one of the best places to invest in foreclosures because of the housing market’s stability.

“There’s mortgage foreclosures everywhere,” said Mark Simmons, a vice president at Mortgage South in Anderson. “Like anything, when it hits CNN, when they start talking about it, it becomes national news.”

Mr. Simmons and Jeff Heintz, who’s also a vice president at the North Main Street lender, say they believe the market overreacted when subprime lenders started shutting their doors.

Investors started pulling out from South Carolina mortgage lenders, but the market will correct itself, Mr. Heintz said.

Candy Brock, co-founder of TC Lending in Anderson, said 90 percent of her clients have high credit and a low debt-to-income ratio — totally different than three years ago, when the market was flooded with first-time buyers seeking 100 percent financing.

“We’re not seeing a lot of people calling in trouble,” Ms. Brock said.

SOURCE: Independent Mail