Some frightening numbers were released today regarding local foreclosures. The mortgage meltdown looks worse here than the national average.
Sixty-nine year old Carol Thomas wonders how long she'll be able to have a cup of coffee in her kitchen. She just received notice that her house is in foreclosure.
"The questions I was bringing up as we were doing the loans, he kept telling me not to worry about it, we're going to do it all over. The gentleman I had has now gone to prison," Thomas says.
Meanwhile, Carol Thomas is being held hostage by a house payment that's jumped 3-hundred dollars due to an adjustable interest rate.
"It went from 6.4% to 9.4% and it's not going to stop. It'll go up in May," Thomas says
Thomas is not alone in getting stuck in a serious subprime loan situation.
A report released Monday predicts Peoria and Tazewell County being above the nationwide average for foreclosures. See related links for more information.
"Requests for housing counseling has increased by 100% in the last 30 days. We're seeing families anywhere between 30 days to 120 days late on their mortgage," Local Housing Counselor Cheryll Boswell says.
The President just approved a new appropriation that sent $180 million in federal funds for counseling services for homeowners.
Even though most homeowners will not face foreclosure, it doesn't mean they're free from the problem. Foreclosed homes sell for lower prices, bringing down your property value and subsequently bringing in fewer dollars for taxing bodies like cities.
"There are fewer dollars for police protection, fire protection and all the things you account for in government. So, it has a negative ripple effect all the way down," Senator Dick Durbin says
The Democrat from Illinois has a list of ideas to help homeowners.
One is allow people to refinance their loans while in bankruptcy...something currently not allowed.
"The law prohibits the court from renegotiating the terms of your primary residence. Vacation condo, yes. Family farm, yes. But, my house, no, take it or leave it. So at the end of the day, you own it or lose it. I change that law," Durbin said.
Counselors say the best situation is to halt foreclosures and figure out ways to refinance with lenders. If not, nearly 1500 local homes including Carol Thomas' could have a for sale sign sitting in front...due to foreclosure.