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Rural Communities in Virginia Facing Highest Rates of Foreclosure

A Virginia housing advocacy group released ""data"":http://www.phonehome.org/LinkClick.aspx?fileticket=c7ZUcdLpjlc%3d&tabid=36&mid=474 this week that shows the housing circumstances in rural Virginia are arguably some of the direst in the nation.
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Key findings of the report by ""Housing Opportunities Made Equal of Virginia, Inc."":http://www.phonehome.org say that the largest increase in foreclosure filings last year occurred in rural Virginia, easing only slightly when banks began moratoriums to review their foreclosure processes. Without the moratoriums, the report says, Virginia would have seen the largest number of foreclosure filings since the beginning of the crisis. Even with the moratoriums there were more than 60,000 foreclosure filings in the state in 2010.

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The report also asserts that many foreclosure prevention resources have focused on urban and suburban areas despite the growing problems in rural communities. Foreclosure rates in rural areas have nearly doubled since 2008, while foreclosure rates in urban areas have stayed fairly constant.

The report also examined the impacts of the ""lengthy and tangled paper trails"" that develop from lenders packaging loans into mortgage backed securities and selling them to investors. In many instances, banks and mortgage lenders were unable to prove ownership of the note when foreclosing on a property.

In 2009, four out of five mortgage loans were sold to investors.

In a survey of 40 housing counselors, the advocacy group found that 55 percent of respondents said the foreclosure process for homeowners takes an average of fewer than 90 days, with 60 percent indicating they agree or strongly agree that trustees are foreclosing too quickly on homeowners, decreasing opportunities for homeowners to pursue loss mitigation options. Not only that, 92 percent agreed that loss mitigation activities would be more successful if the mortgage servicer would be more responsive.

About Author: Joy Leopold

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