The Mortgage Meltdown and the Raleigh Real Estate Market - Part 1 of 3

Real Estate Agent with Keller Williams Realty

Planning on selling or buying a home in Raleigh, North Carolina?  Concerned about the turmoil in the mortgage industry?  There may be good reason for some concern.  Things have definitely changed.  This article is the first installment in a three part series that addresses this critical issue.

You cannot turn on the news without hearing about rising foreclosure rates and lenders whose future stability is in question.  Or worse yet, lenders that can no longer fund client loans at closing.  A recent example is HomeBanc, a lender with operations here in our Raleigh market that many of my clients had done business with in the past.  Yikes... this is hitting pretty close to home folks!  We need a better understanding of what we are dealing with.

Let's start by identifying more exactly this so called mortgage meltdown.

ForeclosureIt started back earlier this year with a sharp increase in foreclosure rates.  The rate of existing loans that were delinquent also began to rise.  As the experts began to analyze the situation, not surprisingly, the bulk of the increase came from borrowers who had marginal qualifying ratios and either financed 100% of their purchase, or did this in combination with an adjustable rate mortgage.

Since that time foreclosures have continued to climb.  Some lenders have gone out of business while others have had their future stability publicly questioned. And as usual, fear of the unknown has a firm grip on most everyone who is involved.

So how many homeowners in foreclosure are we talking about? According to, 3% of US home owners have lost their homes to foreclosure this year.  This represents a staggering 41% increase over 2006.  Almost a quarter million properties have been foreclosed on in 2007.  It is estimated that several hundred thousand more homeowners are delinquent on their payments.

As a result of this increasing consumer default rate, it has been reported that over 100 lenders have closed.  Most notably, however, is the massive tightening of credit standards and qualifying ratios that have resulted.  This is what will have the greatest impact on home sellers and buyers in the greater Raleigh real estate market.

What has changed as a result of the credit crunch?

To read more, click here


Comments (5)

Peter M . Christopher
Fairfield County Home Inspection LLC - Fairfield, CT
Residential & Commercial Inspections in
Welcome to A/R !
Aug 28, 2007 07:18 AM
John Novak
Keller Williams Realty The Marketplace - Las Vegas, NV
Henderson, Las Vegas and Summerlin Real Estate
Welcome to ActiveRain, Bob, from a fellow KW agent! Nice detail on this in taking a national issue and showing how it's affecting your local market. Looking forward to parts 2 and 3.
Aug 28, 2007 03:33 PM
Bob Fortner
Keller Williams Realty - Raleigh, NC
Raleigh Real Estate

Thanks John and Peter.  It's great to be here! 

John - How are things in Las Vegas?  I was there for KW Family Reunion in February.  I'll have to be sure to look you up next time, although I understand that FR will be in Atlanta this year.  Either way we'll have to make a point to say hello!

Part 2 of this article is up now and part 3 is not far behind.

Aug 30, 2007 07:23 AM
Mike Mueller
Tech and Social Media Consultant - Walnut Creek, CA

I’d like to personally welcome you to ActiveRain!

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Aug 30, 2007 09:24 AM
Bob Fortner
Keller Williams Realty - Raleigh, NC
Raleigh Real Estate
Thanks Mike!  I appreciate the warm welcome and the advice on resources.  I just started my blog over at , so I'm on a pretty steep learning curve right now... and loving it!  I look forward to getting very involved here at Active Rain.  Thanks again!
Sep 01, 2007 01:13 AM