"Creative Mortgage Products" Result In Foreclosure
It has been documented that a high percentage of subprime loans are defaulted on within 3 to 5 years. This St. Paul story shows how that looks on the ground. "Last year set a recent record for home foreclosure sales in all seven metro-area counties, and so far this year Ramsey, Hennepin, Dakota and Scott counties are ahead of last year's pace."
"'For all the news that the economy is getting better, it's not showing up in our office,' said Hennepin County sheriff's deputy John Villerius." It doesn't matter how good the economy is. These borrowers run into inevitable problems and discover they can't afford the homes.
"Several sheriff's departments in the seven-county metro area report that many of their sales are relatively new mortgages, originated within the past few years. 'I expected it. I think it will get worse,' said Sgt. Lori Kratzke of the Ramsey County Sheriff's Department, who handles the county's foreclosure sales."
"Barb Carr, one of two full-time foreclosure-prevention specialists working for the city of St. Paul, is more explicit. 'God forbid what's going to happen when those interest rates go up.'"