Fairfax County saw five times the number of home foreclosures in the first half of 2007 as it had during the same period last year, according to county figures. The problem grew as homeowners increasingly found themselves unable to pay their mortgages or sell their houses in a cooling market.
“Fairfax, basically, is not immune from what’s going on in the rest of the country,” said Ira Rheingold, executive director of the National Association of Consumer Advocates.
To blame for the rash of foreclosures — which grew in Fairfax County from 190 in the first two quarters of 2006 to 987 for the same period in 2007 — were lenders who qualified homebuyers for adjustable-rate mortgages they were later unable to afford, Rheingold said. And with the housing market on a decline, those owners found it tougher to sell their houses.
“The incredible [foreclosure] spikes that we’re seeing right now really are a product of banks being out of control in their lending practices,” he said.
The problem won’t abate until 2008, Deputy Fairfax County Executive Ed Long predicted, with mortgage companies now trying to clean up their practices. He said the number of foreclosures was still only a fraction of the 233,000 residential properties in the county.
Rheingold said the issue is rooted in the popular misconception that lenders won’t qualify people for loans they don’t have the ability to pay for.
“Time and again, there were loans being made that people could not afford,” he said. “Now it’s all coming home to roost.”
