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Charlotte Foreclosure Homes Rising, TARP Not Helping

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By : John Cutts    99 or more times read
The increase in the number of Charlotte foreclosure homes last month indicated that the federal government's Troubled Asset Relief Program (TARP) is not working as expected, according to industry experts.

Statewide, the number of foreclosure filings increased by 43 percent in August compared to the same month a year ago. Mecklenburg County foreclosure filings rose by 80 percent last month.

Industry experts said that the foreclosure problem, which triggered the nationwide recession, started with subprime loans that were issued to borrowers with questionable credit and payments that they could not afford.

They pointed out that the economic downturn has pushed the unemployment rate in the state to double digit high, placing more homeowners at risk of defaulting on their mortgage payments.

Compounding the recession and unemployment problems are the drastic decline in home values which make it difficult for homeowners to sell their properties they could no longer afford to pay.

Experts said that the increase in the number of Charlotte foreclosure homes does not only affect those who lost their homes but also more on people living near the foreclosed properties. Foreclosures forced prices of surrounding properties to dive below their market value. This leaves many homeowners with properties that are worth less than their mortgage.

Economists said that many homeowners have sold their houses at depressed prices in order to avoid foreclosure. Majority of homeowners who were forced to sell their properties at depressed prices are those who have had their houses for a long time and accumulated more equity.

When they defaulted on their mortgage payments, they tried to refinance to reduce their mortgage payments. However, with the current market condition, most of them failed to refinance and they have no choice left but to allow the banks to foreclosed on the property or lower the price to sell for an amount just enough to pay off their debts.

It can be recalled that President Barack Obama got the U.S. Congress to pass the TARP to purchase bad loans from banks to help them recover and boost their lending business. But since the inception of the program, foreclosure slowed a little but picked up again with a vengeance. Industry experts are quick to point out that TARP is not doing well in helping distressed homeowners in North Carolina avoid foreclosure.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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