NBC29Fighting Foreclosure in Charlottesville

Fighting Foreclosure in Charlottesville

Reported by Alyson Smith
May 29, 2007 

According to a published report, Virginia is  35 percent higher than the national average for foreclosures. In fact, foreclosures are up 138 percent in Virginia over last year.

In Charlottesville, the Piedmont Housing Alliance is hoping to change that.

The Piedmont Housing Alliance is receiving a flood of calls from people facing foreclosure asking for help.

"Our clients that have actually bought houses through Piedmont Housing Alliance are not the people that are being foreclosed upon," said PHA's Stu Armstrong. "It's the folks that have gone out into the open market where there's subprime lending going on that have gotten into loans that are interest only or adjustable rate mortgages that are very vulnerable."

Armstrong says a factor that could be affecting Virginia's high foreclosure rate are high interest pay day and car title loans that charge interest as high as 780 percent. The loans are easy to get--with no credit check usually--causing people to get into a vicious cycle of debt that can cost them their home.

"Maybe some of those laws need to be looked at in detail by the General Assembly so we can put caps on interest rates, that we can prevent people from getting into trouble," suggested Armstrong. 

Regardless, PHA says education is the key to not getting into a position of default or foreclosure in the first place.

"Get educated. How to manage their money. Don't assume you know how to manage your money," insisted PHA's Shelly Murphy. 

PHA says your total debt, including your housing costs, should not exceed 40 percent of your gross income. That will help keep you from falling into foreclosure. 

PHA also offers classes and counseling to anyone in any income bracket looking for advice on buying or owning a home.