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Stamford foreclosures increase in the face of theory

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By : John Smith    99 or more times read
Although theoretically the extent of foreclosures is in inverse proportion to the trend in house prices, the opposite appears to be the case in Stamford, Connecticut, where homeowners continue to be dispossessed of their rights to redeem their mortgages in the face of a hardening property market.

This is based on statistics, compiled by the Stamford Community Development Office, that reveal 49 pre-empted mortgages so far this year, with 40 having taken place in the first quarter alone. That’s 8% more foreclosures hitting Stamford owners than the same period last year, and more than double the orders granted for that part of 2008. To reinforce that this is not merely a blip on the radar, the Community Development Office also points out that the 120 properties proscribed in the course of 2009 were more than triple the 2007 rate when the troubles over sub-prime lending first emerged.

The Stamford City findings are based on Land Office records – according to these the rate of lis pendens first notifications have been on the increase too. These early warning signals of property seizure to follow were up 11% year-on-year compared to the first quarter of 2009, or from 1,240 to 1,270 first foreclosure notifications. To put this in perspective, the same quarter of 2009 saw just 684 filings.

These foreclosure trends in Stamford, Connecticut fly in the face of a rejuvenating local real estate market. The median price of a single-family home was up 19% compared to the same 2009 period and stood at $430,000 at the end of March 2010. Although it is true that this may in part have been on account of the parallel expiration of the federal homebuyer’s tax credit, property sales nonetheless surged from 164 to 253 – that’s a 50% improvement first-quarter-on-first-quarter over 2009.

So why did an increasing number of Stamford households lose their collateral in the face of such strong markets? And why is the City’s Housing Development Fund continuing to advise a growing number of families threatened with foreclosure?

The Development Fund’s President Joan Carty has confirmed that the average number of daily enquiries at clinics has jumped from 10 to 40 over the past 6 months. “What we are seeing is a continuing rise in the number of people who are falling behind,” she said. “We don’t see a crest yet. The wave just keeps rising.”

Perhaps rising unemployment is pushing the trend? The United States Bureau of Statistics recently reported that the rate of joblessness in the Bridgeport Stamford Norwalk Region rose by 9% in January 2010, although this had tapered down to 8.5% by March – 1% higher than the same period in 2009.
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