Upper Middle Class Area Hit by Foreclosures

Upper and middle class areas are also being hit by foreclosures. Driving down a Hampton Town – a middle class set up – it is not surprising to see at least 30 houses have been foreclosed in the previous year. Two years ago only two houses had been foreclosed. No further proof is required that foreclosures are reaching out its tentacles towards the upper class.

Dan Murrer of RealSTAT comments that foreclosures are attacking properties belonging to people of all professions and coming from different backgrounds. The company has made a survey of 32 prosperous towns and its surroundings. The findings have been startling. There has been a high jump to 558 reo properties in 2007 from only 180 in 2000. This calculated to an increase of 210%. These are sure signs that foreclosures are moving on to higher ground from the poorer regions. Murrer says, “The fact that the foreclosures are increasing in these middle-class neighbourhoods is indicating that the ‘average Joe’ with a standard mortgage is the one who’s getting foreclosed on.”

Foreclosures in Ross increased to 38 in 2007 from 5 in 2000. In Hampton it went up to 30 from 2 during the same period. This is the general trend everywhere. In Bethel Park the increase was from 12 to 38 and Mt. Lebanon from 10 to 25. In Moon Township in the west foreclosures have shot up to 27 from 8 and in the east Plum Boro saw a rise in foreclosures to 35 from 12.

Ray Dietz of Allstate Financial attributes the primary cause to greed on both sides – the borrowers wanted more swank houses and the lenders gave away mortgages without checking any credentials. He said, “It’s a two way street. You’ve got the greed of the borrower who’s trying to buy a home they cannot afford, hoping the home’s going to continue to appreciate and move up in value and you have the greed of the lender who is purchasing the mortgages at the end saying, ‘I will waive sound lending practices in order to make a larger profit.’”

The question then is that why did the authorities look the other way and allow this sort of lending to continue? The net result is that even people who could have afforded the mortgages are now in danger of being foreclosed upon because of the slump in the real estate. Combined with this is the rise in fuel and food prices.