Bank Foreclosure Homes Rate Continue to Rise in Vermont

by Donald Hanz on States

The rate of foreclosure in Vermont remains a threat to the state and its economy. Last month, filings for bank foreclosure homes jumped by 14 percent to 1,135 from 996 posted in the same period last year.

According to industry analysts, the rise in foreclosure activity last month was a result of steady increases in filings in the state since last year. In 2009, foreclosure filings posted a 65 percent rise in the state for a comparable seven months for the past two years.

Analysts said that majority of filing increases happened two years ago. From January to July 2007, filings of foreclosures were posted on 688 properties in Vermont. They said that the increases in foreclosure filings in the state posted since 2007 was due to the economic downturn and unemployment.

They also blamed out-of-state banking institutions for giving loans to people who are not eligible to receive mortgages.

Meanwhile, home sales were slow to come in a Vermont market with flat prices. For example, a six-bedroom house in Burlington Hill was listed for auction with an original price of $599,900. It was later reduced to $499,900 and remained at the price of $425,000 for almost six months before it was sold to a lender for only $357,000.

The lenders for the Burlington property are Countrywide Financial. Bank of New York and Bank of America.

According to industry experts, it is not unsual for lenders to buy foreclosure properties. They pointed out that one in 10 auctions that occurred in the state ended in a third party sale deal. They added that at auctions, buyers can bid for a property as low as $1.

However, experts noted that bidding at auction sometimes can be frustrating especially if you do not know why banks refused your bid offer. Meanwhile, Vermont is much better off with other states despite the rise in foreclosure rate, experts said.

For the last quarter of 2008, 3.2 percent homeowners in Vermont were delinquent and in danger of foreclosure, compared with the national average of 6.3 percent.

In Chittenden County, the number of foreclosed homes increased just like the rest of the state. But they noted that the percentage increase was smaller, with July having only 181 filings compared with 168 filed in the same month the previous year.

disclaimer