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Foreclosures spike in NEPA
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BY DAVID FALCHEK
STAFF WRITER
As the economic crisis continues to affect Main Street, the number of Northeast Pennsylvania property owners facing foreclosures has increased by double digits.
While the region has seen minor increases, and even decreases, in foreclosure rates throughout the turbulent year, continued pronounced increases are in the offing, observers say.
In Luzerne County, a sheriff’s sale Dec. 5 will include 185 new properties — a 15 percent increase from the number on the auction block roughly a year ago.
In Lackawanna County the numbers are up slightly, but the increase is deceptively small. A sale scheduled for next week has 92 properties listed, compared to 87 a year ago — only a 5.7 percent increase. But unlike 2007, the Lackawanna sheriffs office scheduled a sale in October, cutting short the period for foreclosures to collect.
“The difference may be only a week or two, but it gives more time to file,” Fran Dirienzo of the Lackawanna County Sheriff’s Department, said. “Had it not been for our October sale, our numbers this year would have been greater.”
The double-digit hike in foreclosures ends a respite Luzerne County has enjoyed so far in 2008. Luzerne appeared to be faring well in earlier auctions, with foreclosures down 11 percent for the October sales and 4 percent for the Aug. 1 sale, compared to last year.
If national figures are a guide, foreclosure will continue to grow, Austin Jaffe, Ph.D., director of the Institute for Real Estate Studies at Penn State University, said. The wave of foreclosures is one reason policymakers are trying to stem the tide, he said.
“Foreclosures are a costly legal procedure, and they are at an all-time high,” he said. “There is sympathy for government intervention.”
One solution would have lenders renegotiate the terms of mortgages for those under the threat of foreclosure. Dr. Jaffe said neighborhoods with several foreclosed properties could suffer “a spillover” of declining property values.
“The effects of foreclosure are well known and had added to the urgency,” he said.
Steve Farrell, owner of Classic Properties in South Abington Twp., which has offices in both counties selling foreclosed properties for lenders, has sensed the desperation of some financial firms. Earlier this year, lenders would want to list properties for 20 percent more than unpaid principal on the loan to test the waters and give themselves six to nine months to make back some money.
Now banks find themselves with growing portfolio of properties, no cash, and looking to merge with other institutions and anxious to clean up their books.
“Now, they tell us to do whatever we need to sell it,” he said.
The foreclosures flood has an upside, Mr. Farrell said. It gets people into homes for a bargain. Lenders’ incentive to sell helps keep inventory off the market, he said, helping it maintain some balance.
Early next year, he predicted, rural counties of Pike, Wayne, and Monroe counties will see foreclosures spike.
Contact the writer: dfalchek@timesshamrock.com
While the region has seen minor increases, and even decreases, in foreclosure rates throughout the turbulent year, continued pronounced increases are in the offing, observers say.
In Luzerne County, a sheriff’s sale Dec. 5 will include 185 new properties — a 15 percent increase from the number on the auction block roughly a year ago.
In Lackawanna County the numbers are up slightly, but the increase is deceptively small. A sale scheduled for next week has 92 properties listed, compared to 87 a year ago — only a 5.7 percent increase. But unlike 2007, the Lackawanna sheriffs office scheduled a sale in October, cutting short the period for foreclosures to collect.
“The difference may be only a week or two, but it gives more time to file,” Fran Dirienzo of the Lackawanna County Sheriff’s Department, said. “Had it not been for our October sale, our numbers this year would have been greater.”
The double-digit hike in foreclosures ends a respite Luzerne County has enjoyed so far in 2008. Luzerne appeared to be faring well in earlier auctions, with foreclosures down 11 percent for the October sales and 4 percent for the Aug. 1 sale, compared to last year.
If national figures are a guide, foreclosure will continue to grow, Austin Jaffe, Ph.D., director of the Institute for Real Estate Studies at Penn State University, said. The wave of foreclosures is one reason policymakers are trying to stem the tide, he said.
“Foreclosures are a costly legal procedure, and they are at an all-time high,” he said. “There is sympathy for government intervention.”
One solution would have lenders renegotiate the terms of mortgages for those under the threat of foreclosure. Dr. Jaffe said neighborhoods with several foreclosed properties could suffer “a spillover” of declining property values.
“The effects of foreclosure are well known and had added to the urgency,” he said.
Steve Farrell, owner of Classic Properties in South Abington Twp., which has offices in both counties selling foreclosed properties for lenders, has sensed the desperation of some financial firms. Earlier this year, lenders would want to list properties for 20 percent more than unpaid principal on the loan to test the waters and give themselves six to nine months to make back some money.
Now banks find themselves with growing portfolio of properties, no cash, and looking to merge with other institutions and anxious to clean up their books.
“Now, they tell us to do whatever we need to sell it,” he said.
The foreclosures flood has an upside, Mr. Farrell said. It gets people into homes for a bargain. Lenders’ incentive to sell helps keep inventory off the market, he said, helping it maintain some balance.
Early next year, he predicted, rural counties of Pike, Wayne, and Monroe counties will see foreclosures spike.
Contact the writer: dfalchek@timesshamrock.com
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