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Developers feeling brunt of changing foreclosure landscape

By Jessie Burchette
jburchette@salisburypost.comThe numbers of foreclosures in Rowan County continue to grow, hitting an all-time one month high in July.
While federal, state and local programs are keeping families in their homes, developers and builders who bought into the housing boom are feeling the brunt of foreclosures.
Many homeowners are still falling behind on their payments and facing foreclosure despite programs that can save their homes.
Statewide the number of foreclosures in the third quarter ó July through September ó fell by six percent.
But foreclosures across North Carolina rose 51 percent in September compared to the same period last year.
In Rowan County, the number jumped from 53 in July 2008 to 105 this past July ó almost a 100 percent increase according to records kept by the N.C. Administrative Office of the Courts.
Since July, the numbers have dropped to a level similar to last’s years pace.
In recent months, the types of foreclosures have changed.
“We’re doing lots, developments, commercial buildings, not just residential,” Jeff Barger, clerk of court, said recently. “Some are builders … lots … subdivisions; we rarely had any before.”
Barger, who presides over foreclosure actions almost daily, saw a drop in the first three or four months of the year. But the numbers are again growing.
He averages hearing 10 to 15 cases a day and sees no sign of a drop off.
The situation for homeowners may be impproving.
Lou Adkins of Salisbury Community Development Corp. said the agency is still helping 75 to 100 people each month.
“Most of the banks and mortgage companies are doing loan modifications,” Adkins said. “The biggest problem is that people wait to ask for help until they get the foreclosure hearing notice. The process (loan modification) takes four or five months.”
She advises anyone who is behind on their house payments to go ahead and call her at 704-638-2154 or Robbie Stevens at 704-638-5383.
Adkins noted that while single family home foreclosures appear to be slowing, more rental property, speculative (spec) built housing is facing foreclosure.
Mac Butner, executive officer with the Salisbury-Rowan Homebuilders Association, laments the plight of home builders and real estate nationwide. He’s also active in the N.C. Homebuilders Association, serving as chairman of the legislative committee.
“It’s pretty prevalent statewide, developers having to give up the land … large parcels … the market is not there, the financing is not there,” Butner said.
“They don’t have the capital resources to keep feeding the monster and hoping the housing market will come back.
“Most are making payments. It gets to the point, you can’t make the payments and you can’t sell them. We’re in unique times.”
He credits local developers and builders with being smart and conservative by not getting tied in large tracts of land they can’t afford to sit on.
Butner thinks the housing industry will take years to recover. “There are a lot of folks who were financially strong. Through no fault of their own, builders got caught up in it. Having one or two spec homes you can’t move can bring a builder down in a couple of months.”
Butner said the government needs to focus on fixing housing. “The stimulus has not fixed the housing problem. If you fix housing, you fix the economy. It has a tremendous trickle-down effect. … New houses mean new appliances, new furniture, new draperies, new playground equipment. It spreads out. All kinds of good stuff happens when you sell a house.”

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