Local News

Real Estate Agents Spread the Word on Avoiding Foreclosures

Posted July 4, 2007
Updated July 5, 2007

— A group of local real estate agents who want to stop to the growing number of foreclosures in Wake County took to the streets Wednesday to help educate people about their options when buying a home.

"We don't want to see people losing their homes. So, we're trying to get out and educate people and work with people so they don't have to," real estate agent Darlette McCormick said.

House foreclosures in Wake County have nearly doubled this year, according to the Association of Community Organizations for Reform Now. In 2006, mortgage companies filed 169 foreclosures; as of June 20 of this year, the number was 283 for the year.

"It's very high, especially in the southeast end of Raleigh," said real estate agent Brenda Allison, who along with McCormick, is involved in the campaign "Save the American Dream for Southeast Raleigh."

The group is going door-to-door throughout the summer and plans to hold seminars to educate prospective home buyers about problems that can lead to foreclosure.

Predatory lenders are one of the biggest contributors to foreclosures, the group says.

"Because there's some loan officers that's here today, gone tomorrow," Allison said. "There's a lot of them that aren't in there long enough to be educated of what program fits the homeowner."

A good example of that, McCormick said, is a loan officer recommending the prospective homeowner take out an interest-only loan, which doesn't work for everybody because it requires the borrower to maintain a good credit standing.

"So, when it's time to refinance, they actually have credit problems," McCormick said. "Their credit is actually worse than it was when they got in their home, and they're not able to refinance."

Homeowners here say they are glad to see real estate agents trying to help, especially when they see neighbors who have already lost their homes.


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  • tlh1005 Jul 6, 2007

    "The majority of the foreclosures in SE Raleigh ... are due to the borrowers wanting it ALL. The "blinged" cars, the HDTV's, the stereo systems, the cell phones, and the house."

    I'm not picking on you, but this is a statement built on stereotypes. Yes I am sure you can find some in SE Raleigh with car payments as much as a third of their mortgage. You can find the same in Brier Creek.
    When you take a drive through SE Raleigh it's not new BMW's you're seeing in most yards. I too speak from experience. I've lived in 5 different Raleigh zip codes, the first of which was 27610 for just over 20yrs.

    I'd attribute increase foreclosures everywhere to relaxed lending. The American way is to overspend, so there are foreclosures in the affluent zipcodes just the same. But, borrowers on the low end are more prone 2 foreclosure. Many have been forced into SE Raleigh by the high appreciation seen in much of Raleigh. It makes sense demographically that the SE area would have more foreclosures.

  • Firegal Jul 5, 2007

    Coming from a REALTOR, I would much rather get you into a home that you are comfortable in as far as payment goes. Most of us won't tell people to buy the more expensive house because #1 we have to take ethics training as a REALTOR, #2 most of us have those ethics, #3 a happy client will usually list with you as well when they are ready to sell..the bank doesnt care who they list with. Repeat happy clients is how we make a living, a successful REALTOR's business is made off of referrals,keep that in mind when you are talking about how we are only after money and dont do whats best for our clients--totally untrue.

  • whatusay Jul 5, 2007

    I know of only one realtor who I trust. The rest are in the business for one reason, money. No advise from a realtor is free. They are planting seeds, so you will remember them when you need to sell your house. That is probably the only reason. If they teach you how to keep your home how can they make money.

  • xxxxxxxxxxxxx Jul 5, 2007

    tlh1005, I am certainly nowhere near the $3400 or even the $2600 price range; my house was much less than 2600 sq. ft and much less that $150k when I bought it several years ago. However, I too was surprised, first, at the realtors who told me I was ready to buy a house when I clearly wasn't, and later qualified me for huge amounts of money that I knew perfectly well I couldn't afford. I ignored them, bought a house I could afford and haven't missed a payment or even been late in 8 years.

  • NeverSurrender Jul 5, 2007

    Gatsby, there are certainly deeper motives to this initiative. No one is going to give up valuable face time with potential paying clients for nothing.

    The biggest incentive is obvious...foreclosures in a neighbourhood tend to really depress prices thus driving down commissions for realtors. Foreclosed homes often require significant work to make them market ready or they're an outright dump job on the market to score whatever cash the lender can and there isn't the incentive for a realtor to represent other homes knowing how much harder they'll have to work to compete against the foreclosure.

    Add to that consumer resentment against predatory lending and a view that realtors may not have done all they can to put the buyer into a reasonable mortgage...one might fear potentially onerous regulation from the government and no one really wants that.

    Besides, some pro bono "education" is a nice mitigation effort in court when predatory practises morph into lawsuits.

  • Gatsby Jul 5, 2007

    So what are the real motives for the realtoads? Could it be that foreclosures mark the end of the easy $$$ that they have been skimming off home sales over the last decade? Whats next? Dentist going door to door because people are losing their teeth? If they are just wanting to do a good deed...visit a nursing home. I think the motive for these visits go deeper.

  • NeverSurrender Jul 5, 2007

    "Buyers need to do their homeworks. Buy a house you can afford, not a house you are qualified for."


    And always take advice from loan officers and realtors on the subject of affordability with a big grain of salt. Realtors in particular have a vested financial incentive to put you into the higher price house to maximise their commission.

    A honest realtor will aim for the house that works for you and your budget and will respect your wishes to stay on that budget (particularly one working for you as a buyer's agent who the seller pays for to work for you in the typical split commission scheme).

    But as we've seen recently that whilst the vast majority of realtors and loan officers are probably honest and straightforward with their clients, there are plenty of them out there that will pressure you into an unaffordable mortgage without a second thought after they cash their check.

  • ncvaluer Jul 5, 2007

    Duhhh, here's a novel idea...pay your full house payment on time...that's the best way to avoid forclosure! Know how much you can afford and stick to it.

  • Esq Jul 5, 2007

    I applaud the agents for getting out there and educating these people. Hopefully this new found knowledge will not only help them, but their future generations to make smart finicial decisoins. Sometimes things that appear to be common knowledge isn't for everyone.

  • SpiritWarriorCrackPot Jul 5, 2007

    The conventional wisdom is that 30% of your monthly income should be allocated towards rent/mortgage.

    Every time I calculate that figure, I'm always a little surprised, and scared at how much I need to make to keep my life going.

    Going above and beyond that threshold is a major risk with disasterous consequences if you're unable to meet your financial obligations.

    I'm flabbergasted that people go into foreclosure by purchasing more house than they can afford.