Bank Foreclosure Listings on the Rise in Vermont

by Simon Lindsay on States

Vermont recorded an increase in the number of properties on Bank Foreclosure Listings in May. About 801 properties were included in foreclosure proceedings last month, an increase of 10 percent or 730 properties from last year’s May total.

However, Deputy Commissioner Thomas Candon (Vermont Department of Banking, Insurance, Securities and Health Care Administration) said that despite the rise in the number of properties on Bank Foreclosure Listings, Vermont is still better off than other states.

Candon explained that Vermont experienced an increase in foreclosures in the first two months of this year as moratoriums implemented by several banks last year started to expire. But declining rates followed the first two months of the year until May when it soared again.

In Bennington County, foreclosure filings were reportedly made on 57 properties in May, an increase from 41 on a year-to-year basis.

Candon pointed out that the foreclosure rate in Vermont was more manageable compared with other states because only a handful of homeowners in the state availed of subprime mortgages with adjustable rates. These subprime loans were mostly offered to borrowers who have poor credit histories.

Candon said that banks in Vermont did not offer subprime loans as often as other states did. In fact, only about 10 percent of homeowners who called Vermont’s mortgage assistance hotline in 2009 were concerned that their properties would be added to the Bank Foreclosure Listings because of subprime loans.

He said that the hotline was established with the expectation that majority of people who will use the program have subprime adjustable rates. About 60 percent of the total 414 calls made on the mortgage assistance hotline were due to loss of job or income, 18 percent due to medical costs and 14 percent due to separation or divorce.

Last year, about 342 distressed homeowners placed calls on the hotline.

Meanwhile, nearly 19 percent of homeowners who placed calls on the hotline for the first five months of this year are current on their mortgage payments, 50 percent were delayed and 14 percent are already in some kind of foreclosure proceedings.

Vermont has passed a law requiring mortgage servicers to provide distressed homeowners with basic information about their rights, where and how to seek help to save their properties from Bank Foreclosure Listings.