Virginia Foreclosures

Posted on July 15th, 2008 by saman

The state of Virginia is expected to take a hard blow of foreclosures. One in thirty three homes in Virginia will go into foreclosure by the year 2010. Though a low percentage of home loans were sub-prime, the foreclosure crisis will affect forty three percent of those who own homes in the state in regards to declining property values. This means that half the properties in Virginia will decrease in value.

Almost seven billion dollars is expected to be lost from state and local tax bases and this will have a negative effect on municipal budgets.

Though there aren’t any states that could have foreseen the extent of the foreclosure crisis, Virginia is facing some more serious problems than other places.

According to Realtytrac.com, a website that tracks foreclosures in the country, Virginia is fifteenth in regards to foreclosures and that pace seems to be speeding up in Virginia and across the country.

The state has so far not done a lot to address the foreclosure situation that has been considered severe compared to other places. The only action that has been started in the state is the forming of a foreclosure task force. Other states with serious foreclosure problems have been much more proactive.

Counseling sessions for homeowners in distress have been set up in the state but those who walk into these sessions are not guaranteed a meeting with a counselor. This fact will of course discourage those distressed homeowners from walking in at the last minute. Distressed families who are having financial problems are typically in denial and they often need a lot of encouragement for them to seek assistance. The counseling sessions may be “too little, too late” for some homeowners. About seventy percent of families in trouble will not seek help with their financial situation because they are embarrassed, in denial, or they do not know that there is help available to them.

The state of Virginia has one of the fastest foreclosure processes in the country. If a foreclosure in Virginia is uncontested, the foreclosures process with be completed in ninety days. There is also no right of redemption. By comparison, Massachusetts and New York are considering ways to stall the process of foreclosure. The foreclosure process in New York can take four hundred and forty five days. Delaying foreclosure may not be the best way to handle the problem of but at least it allows for dialogue about how to solve the foreclosure problem.

Virginia is not defending itself against the problems it is going to face and these problems will strike a deadly blow to the revenue and tax base of local and state governments.

As the value of homes decrease, the tax base decreases as well. When this happens it might be too late and the government will drastically have to cut back services and other things because there has been a decrease in tax revenue.

The federal government is very slow to act even though there are about five thousand foreclosures each day. Since the government is acting much too slowly to stop foreclosures, states must take it upon themselves to figure out ways to solve the problem and respond rapidly.