Behind the foreclosure numbers


Today’s story on Delaware ranking third from the top in foreclosures is significant news.

The Mid-Atlantic region is now a hotspot for people no longer able to pay their mortgages.

Still,  I posted the story with some reservations.


All too often,  various constituencies spin such information to fit their agenda. 

Some will see the ranking as a sign that decades of Democrats in charge are responsible for the situation.  Those on the left will see it as a sign that greedy lenders continue to prey on the less fortunate.

The truth is somewhere in between.

Delaware has laws that favor lenders, but efforts have been made to provide relief. In many cases, homeowners were too far underwater and foreclosures became inevitable.

Democrats have been adding more regulations that do n’t help the economy. Still, the high rates have occurred elsewhere in the region regardless of the political party in charge.

My theory is that too many homeowners in Delaware fell prey a decade ago to liar loans that lacked due diligence in determining the ability to pay.

Topping things off were lenders  that offered mortgages at 100 to 125 percent of equity and the practice of bundling mortgages to investors. Credit agencies gave their blessing to the loans, despite the shakiness of many of the mortgages. The practices came close to toppling the world financial system in 2008 and 2009.

The same  factors were in place in the Sun Belt, but the foreclosure process moved more rapidly, and more buyers were around  to acquire the troubled properties.

The Mid-Atlantic fell victim to a slow-motion crisis as workout efforts continued, but the final result was often foreclosure.

Foreclosures and other issues deserve more scrutiny. Unfortunately, Delaware lacks a well-funded research institute that could crunch the numbers and come up with conclusions unfettered by partisan or philosophical bias.

The research would benefit a General Assembly and other governing bodies that often act with limited information.

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