Last year in Culpeper resulted in the fewest residential foreclosures since the start of the mortgage crisis in 2007, another positive sign for the local housing market.
Culpeper County foreclosures in 2012 totaled 165 homes going into default compared to 198 in 2011 - a nearly 17 percent reduction, according to county records.
At the height of the housing disaster in 2008, 467 Culpeper houses went into foreclosure. Another 367 and 315 county properties went into foreclosure in 2009 and 2010, respectively.
In all from 2007 through 2012, nearly 1,700 Culpeper County houses went back to the bank through foreclosure, a trend that fortunately appears to be on the decline.
"Housing turned a corner in 2012, and signs of recovery were evident," wrote Mary Dykstra, president of the Virginia Association of Realtors, in a recently released 2012 Virginia Housing Market Report. "It was a year of improved household balance sheets and increased business investment; it was a year we saw home values rise and foreclosures fall. Houses were selling again - a good sign."
Challenges remain, however, she said including credit availability remaining tight; inventory of homes for sale in Virginia dropping to the lowest level in years as a result of many 'underwater' buyers choosing not to sell if it means taking a loss and ongoing economic uncertainty.
Active listings in Culpeper in January totalled 221, compared to 253 houses on the market in January of 2012, a nearly 13 percent decline in inventory, according to MRIS. The 43 units sold last month in Culpeper represented a 38 percent increase over the 31 sold last January.
The average sold price in Culpeper in January was $168,813, according to MRIS, compared to $189,891 last January, the MRIS report said, representing an 11.1 percent decline in sold home prices. Houses in Culpeper County are staying on the market for a shorter period - an average of 69 days in January compared to 91 days in January 2012.
Statewide, foreclosures continue to be an issue with resolution of distressed mortgage loan inventories continuing to be slow in spite of progress in resolving loan servicing issues, according to a September 2012 report by the Virginia Housing Development Authority.
"Since mid 2008, the number of troubled subprime mortgages has fallen by nearly 40 percent as a result of loan modifications, foreclosures, short sales, deeds in lieu of foreclosure and refinancings," the VHDA report said. "However, a second larger wave of defaults has been driven by unemployment and underemployment."
Last February's signing of the national mortgage servicing settlement agreement has also sparked modest improvements in the resolution of distressed loan inventories, according to VHDA. Per that settlement, Virginia will receive $3.5 million from Bank of America, J.P. Morgan Chase, Wells Fargo, Citigroup and Ally Financial/GMC - financial institutions that engaged in so-called "robo-signing" of foreclosure documents and other fraudulent measures.
"We joined the multi state investigation because there was credible evidence that banks had engaged in wrongdoing in the commonwealth," said Virginia Attorney General Ken Cuccinelli in announcing last February the state's signing on to the $25 billion settlement with the nation's five largest mortgage servicers over foreclosure abuses. "Based upon our investigation and the investigations conducted by other states, we were able to confirm that the banks have been guilty of robo-signing and disregarding certain servicing issues. The banks must answer for this conduct, and this settlement makes them do just that."
For more information, see nationalmortgagesettlement.com
Senator Warner on foreclosures
U.S. Senator Mark Warner, D-Virginia, in a recent sit-down interview with the Star-Exponent said some new federal regulations have been put in place since the start and height of the subprime mortgage situation.
"There was blame in the banks, but there were also folks who took out loans that they shouldn't have taken out in the first place," he said, describing new federal rules for the backing of mortgage securities by government-sponsored Freddie Mac and Fannie Mae. "They've said going forward they are only going to do that backing if you meet a QM, a qualified mortgage ... so I think prospectively there's going to be less abuse. The problem is going to be - and this is a place I think the government should have acted more probably two or three years ago - on giving greater relief for people who are underwater at least letting them modify their loan down to a lower interest rate. Most of those programs have not worked very well."
What about the financial professionals who made millions peddling less-than-secure mortgages with high interest rates and in some cases no qualifying documents required?
"They are going after some of them now, but you're right they've not gone after them as much as they should," said Warner. "If I look back when I first got elected and we were starting this thing on financial reform, trying to bring the banks back in, the area the Obama administration and Congress probably did the least on was housing relief. What the experts all said was just don't screw it up anymore, you know, this will work its way through, well they were wrong. It's now worked its way through, but it's been four and a half years and a lot of people have been put out."
Warner said he's most disappointed by the inability of homeowners to refinance their homes to a lower interest rate.
"Bringing your mortgage rate down to market would have been the best place to move more aggressively," he said, adding, "They've done a couple million of them, but it was cumbersome and it wasn't done very efficiently."
Culpeper County foreclosure numbers by year