1 Natasha Greendyk COM 2610-101 05/10/2012 1,129 words The silent victims and perpetrators of the ongoing foreclosure

crisis What lead to so many foreclosures? A typical court case for Elizabeth Repetti, an attorney at Bell-Davis-Pitt; Attorneys and Counselors at Law, includes defending the now-homeless and helping her clients ease through the foreclosure process. But the economic recession that hit in 2008 has created even more work for her and a lot of the clients place the blame for the loss of their homes on her. I tend to get the venting and frustration of these people who must go through a foreclosure, said Repetti, who specializes in foreclosures and bankruptcies. It isnt easy, going through that kind of thing. Just as banks continue to go under and businesses continue to schedule layoffs, families still struggle to keep their home and attorneys like Repetti struggle to deal with their job, professionally and emotionally. When the recession struck the U.S., an average of 3,100 families foreclosed their home in November alone, according to Realty Trac, Inc., an organization that tracks foreclosures and resells the homes. During the past decade, banks and mortgage brokers were the middleman and began providing loans to homeowners whose credits were borderline acceptable for repayment.

2 We lent out money like candy, said Patrick Pisano, a loan officer at a national bank that he asked to remain disclosed. The realtors thought solely in short-term gains, just looking for a high commission, making a buyers credit the least of their concerns. When the housing bubble burst, those were the homeowners whose homes were the first to go, forced to foreclose and dragged from middle class to the poverty line. The average percent of persons below the poverty level between 2006 and 2010 in North Carolina was 15.5 percent. However, Watauga County in the state claimed a poverty level of 48.9 percent, according to the United States Census Bureau. The poverty levels go hand-in-hand with the rising number of vacant and foreclosed homes. Non-seasonal vacant properties increased 51 percent nationally from nearly 7 million in 2000 to 10 million in April 2010, according to the United States Government Accountability Office. More recently, the issue of foreclosures has decreased some but not enough to claim any type of drastic improvement. In the month of March this year, North Carolina had 19,091foreclosed homes for sale. More specifically, Watauga County had claims that one in every 4,360 housing units had received a foreclosure filing during the same month, according to Realty Trac, Inc.. There are two sides to every story There are multiple entities and organizations involved when it comes to foreclosing a home. The obvious victim is the one whose house is taken away; the not-soobvious is the one who must make the process happen. The homeownership rate in Boone, N.C. is significantly low in comparison to the national percentage. Between the years 2006 and 2010, the average homeownership in

3 the town was 23.9 percent, much lower than the national 68.1 percent, according to the U.S. Census Bureau. It was about two years ago when my husband lost his job and we had to refinance everything, said Laura Crecco, a resident of Boone whose home was recently foreclosed. We lost our home a year after that and its left us with practically nothing, including our pride and sense of ownership. Local organizations have been created to provide homes for those who have lost theirs. However, this process is limited and cannot always take everyone that may need it. It is my job to do the paperwork and selection of whomever we let in to the house, said Sonya Hambly, Transitional Housing Service Coordinator at the Hospitality House in Boone. Its hard to say no when at the end of the day, what makes one loss worse than another? If we had the resources, Id make sure everyone had a home to call their own. A lot of the frustration built up by those who have lost their homes is released on the professionals who are involved in the process of foreclosure rather than the people and organizations responsible for the situations that led to the housing collapse. Beginning the foreclosure process is a difficult step. The borrower or owner must default on their loan or mortgage payments and the lender then files a public default notice, according to Realty Trac, Inc.. There are four ways that a foreclosure can end, Repetti said. There is a grace period where the borrower can pay off the defaulted amount or they can sell the property to a third party. They can also give their home to a public auction at the end of their

4 foreclosure period. Lastly, the lender takes control and ownership of the foreclosed property. Along with the responsibility of making sure that the court process of the foreclosure goes smoothly comes the emotional tie to the clients for attorneys like Repetti. I had a case once where it was a family of six and I couldnt help but think about what if it was my family going through this, she said. It is hard, sometimes, to not get attached to these cases. The future of foreclosures The recent rate of foreclosures has decreased slightly but predictions state the dire need for that housing bubble to heal itself in order for the economy to improve. There have been multiple reasons for the downfall of the housing market but many are rooted in the original collapse of the economy in 2008. The worst may not be over, and the real economy, as opposed to the one on Wall Street, is still melting down. The housing crisis is still raging. The governments loan modification programs wont be of any help with this round of foreclosures, said Arianna Huffington, author of Third World America: How our politicians are abandoning the middle class and betraying the American dream. A quick recovery is not in the books but the housing market is said to have been improving. Though, families are still losing their jobs, their homes, their money and the years it took to gain all of that. The economy hasnt exactly gotten better, but it is increasing slowly but surely, said Terry Keasler, PhD., professor of finance at Appalachian State University. It most

5 definitely will not be any time in the near future but Id guess in around 10-15 years from now, the amount of foreclosures will decrease by half. But no matter what the rate of foreclosures that exists, the process is handled the same way. Lawyers and attorneys who must deal with these cases, like Repetti, must continue to follow the same guidelines to close a foreclosure case. Its my job and sometimes it isnt easy, she said. But it is always going to happen and someone has to be there to ease the client through the pain. Thats where I come in. -30SOURCES: People1. Elizabeth Repetti Attorney for over 25 years Bell-Davis-Pitt; Attorneys and Counselors at Law erepetti@belldavispitt.com 2. Gloria Cross Board of Directors at Hospitality House in Boone, N.C. Hospitality House crossgi@gmail.com 3. Sonya Hambly Transitional Housing Service Coordinator Hospitality House sonya@hopsitalityhouseofboone.org 4. Laura Crecco Unemployed Boone, N.C. 828-264-1237 5. Patrick Pisano Loan officer

6 Charlotte, N.C. (wished to not reveal bank) 704-995-1051 6. Terry Keasler Professor of Finance Appalachian State University Keaslertr@appstate.edu 7. Marian Williams Associate Professor in Criminal Justice Appalachian State University Williamsmr4@appstate.edu 8. Don Cooke Realtor Allen Tate Real Estate 704-274-9228 9. Janice Perrett Assistant Division of Employment Security Boone, N.C. Esc.jobs.boone@ncesc.gov 10. Jenny Kaplan Unemployed (home was foreclosed) Kaplanjr2@saic.edu DOCUMENTS1. Realty Trac, Inc. Foreclosure Overview and North Carolina Trends 2. U.S. Census Bureau (2006-2010 Census) 3. U.S. Government Accountability Office- Vacant Properties: Growing Number Increases Communities Cost and Challenges Published Nov. 2011. 4. Journalist Resources Post-Foreclosure Experience of U.S. Households 5. Arianna Huffingtons book Third World America: How our politicians are abandoning the middle class and betraying the American Dream